\896c. 


CAIVIPAIGN  TEXT-BOOK 


OF   THE 


National  Democratic  Party 


1896 


53?         ^  K  ,  yv 


National  DEnocRATic  ConniTTEE 

CHICAGO    AND    NEW    YORK 
1896 


g.«(p^ 


SECOND  EDITION,  REVISED. 


?  IV  BE  SIT  7; 

<  INTRODUCTION. 

The  preservation  of  Democratic  principles  and  of  the  Democratic 
party  demands  the  rejection  of  the  platforms  adopted  by  the  Silver  party 
at  Chicago  and  St.  Louis  and  of  the  candidates  there  put  in  nomination, 
whose  victory  would  mean  defeat  to  the  Democratic  party  and  disaster 
to  the  country  which  it  was  organized  to  serve. 

This  motive  has  caused  the  great  uprising  which  the  National  Demo- 
cratic organization  represents. 

The  Populist  Democratic  representatives  of  the  Chicago  and  St. 
Louis  platforms  can  make  successful  ajjpeal  to  their  hearers  only  by  dis- 
regard of  facts,  figures  and  human  experiences. 

This  campaign  text-book  is  issued  by  the  National  Democratic  Com- 
mittee to  set  forth  the  facts,  the  experiences  and  the  arguments 
which  refute  their  claims.  It  is  intended  for  writers— especially  for 
editors  ;  and  for  speakers — particularly  those  engaged  in  debate  ;  and  it 
is  put  in  handy  form  that  it  may  be  carried  in  the  pocket  and  easily  con- 
sulted. It  is  issued  at  a  low  price  that  it  may  also  be  used  for  general 
circulation,  although  it  is  not  intended  so  much  for  a  campaign  docu- 
ment as  for  the  use  of  those  preparing  campaign  documents  and 
speeches.  It  is  intended,  should  the  development  of  the  campaign 
make  it  desirable,  to  issue  early  in  October  a  supplement  which  will  pre- 
sent additional  facts  and  arguments.  A  newspaper  supplement  is  also 
in  i)reparation,  giving  documents,  speeches,  etc.,  in  connection  with  the 
movement,  to  be  issued  at  a  low  price  (|12  per  1,000)  for  general  use. 

Part  first  includes  the  address  and  platform  of  the  National  Demo- 
cratic movement ;  sketches  of  the  two  tried  Democrats  who  are  the 
candidates  of  the  Indianapolis  Convention  for  President  and  Vice-Presi- 
dent ;  their  speeches  of  acceptance  ;  and  evidence  as  to  which  is  the 
true  Democratic  party  as  witnessed  by  true  Democrats. 

Part  second  sets  forth,  in  successive  chapters,  the  arguments,  with 
the  historical  facts  and  statistical  figures  which  justify  them,  refuting 
the  jjosition  of  the  Silver  party  and,  to  some  extent,  the  economic 
and  financial  heresies  and  errors  which  should  prevent  Democrats 
from  supporting  the  sound  money  candidate  of  their  historical 
opponents.  The  first  chapter  shows  that  the  free-silver  plunge  is 
an  experiment  as  new  as  it  is  dangerous.  The  second  shows  from 
the  'history  of   the    Latin   Monetary   Union   and   the  record  of    the 


International  Conferences  how  impossible  it  has  been  to  base  per- 
manent coinage  on  the  ratio  of  15,  15^  or  16  to  1.  The  third  chapter 
shows  how  contradictory  are  the  claims  Of  the  Silver  party  that  silver 
can  be  raised  to  $1.29  per  ounce  and  the  so-called  benefits  t)f  free  silver 
obtained.  The  fourth  chapter  deals  with  the  question  of  public  faith. 
The  fifth  chapter  treats  of  the  relations  of  the  farmer  to  free  silver,  and 
gives  the  facts  and  figures  showing  how  disastrous  free  coinage  would 
be  to  him.  The  sixth  deals  with  silver  and  prices.  The  seventh  shows 
the  relation  of  the  wage-earner  to  free  silver ;  proves  that  wages  have 
not  decreased  during  the  gold  period,  but  the  contrary  ;  and  gives  spe- 
cial attention  to  the  case  of  railway  employees.  The  eighth  handles  the 
Republican  heresies  of.  ''  protection."  The  ninth  shows  the  absolute 
necessity  of  maintaining  law  and  order,  and  deals  with  the  attack  upon 
the  Supreme  Court.  The  tenth  deals  with  the  record  of  the  Democratic 
Administration,  in  relation  to  sound  money,  the  tariff  and  civil  service 
reform.  The  eleventh  treats  specifically  of  the  National  finances,  show- 
ing that  our  revenue  has  not  been  increased  by  the  McKinley  act  or 
impaired  by  the  Wilson  bill. 

Part  third  comprises  a  Free  Coinage  Catechism,  reprinted  by  permis- 
sion of  the  "Evening  Post ;  "  chapters  on  the  principles  of  Money  and 
Banking  from  Bowker's  *'  Economics  for  the  People,"  reprinted  by  per- 
mission of  Messrs.  Harper  &  Bros.  ;  a  statement  of  the  history  and  the 
principles  of  the  Democratic  Party,  from  an  address  by  Edw.  M. 
Shepard  ;  and  extracts  from  "  the  fathers,"  from  the  Presidents  of  the 
United  States,  both  Democratic  and  Republican,  and  from  later  Demo- 
cratic statesmen,  showing  how  thoroughly  sound  money  has  been  an 
American  and  a  Democratic  doctrine,  and  how  entirely  the  platforms  of 
the  Silver  party  have  rejected  Democratic  principles. 

Part  fourth  includes  many  statistical  tables,  giving  the  figures  as  to 
money,  coin,  wages,  prices,  etc.,  etc. 

The  National  Democratic  Committee  presents  this  compilation  in 
the  belief  that  facts  will  tell  and  that  it  pays  to  tell  the  facts. 

The  National  Democratic  party,  which  has  put  forth  as  its  can- 
didates men  linked  with  the  past,  in  emphasis  of  the  fact  that  it  repre- 
sents the  historical  Democracy,  faces  the  future,  in  its  platform,  in 
belief  that  its  work  is  necessary  to  preserve  the  Democratic  party  for 
1900;  that  with  the  dawn  of  the  twentieth  century,  if  not  at  the  close  of 
the  nineteenth,  the  Democratic  party  will  again  be  charged  by  the 
American  people  with  the  upholding  of  American  principles  in  the 
administration  of  the  people's  government. 


CONTENTS. 

Pabt  I — Platform,  Candidates,  etc. 

Address  of  Executive  Committee : , 1 

The  National  Democratic  Platform 3 

True  and  False  Democracy  on  the  Money  Question — The  Platforms 

Compared 10 

The  Candidates  : 

For  President — John  M.  Palmer 12 

For  Vice-President— Simon  B.  Buckner 14 

Speeches  of  Acceptance  : 

General  Palmer's  Speech 18 

General  Buckner's  Speech 22 

The  True  Democratic  Party — the  "Witness  of  True  Democrats 25 

Part  II — Issues  of  the  Campaign?, 

The  "  Free  Silver  "  Plunge  a  New  Experiment 1 .  01 

The  Latin  Monetary  Union  and  the  International  Conferences 1 .09 

The  Claim  that  Silver  Can  be  Raised  to  Gold  Value 1 .23 

A  Question  of  Public  Faith 1 .31 

The  Farmer  and  Free  Silver 1 .42 

Silver  and  Prices 1 .  56 

Labor  and  Free  Coinage 1.67 

Protection  the  Parent  of  National  Disaster. 1 . 82 

The  Question  of  Law  and  Order. 1 .91 

Record  of  the  Democratic  Administration 2 .  00 

Part  III— Principles  Underlying  the  Campaign. 

A  Free  Coinage  Catechism 3.01 

Principles  of  Money  and  Banking 3.16 

The  Democratic  Party  ;  its  History  and  Principles , 3.32 

Public  Men  on  Sound  Money 3.40 


Part  IV — Statistical  Tables,  etc. 
le  tables  in  the  body  of  the  book  are  repeat© 

Production  of  Gold  and  Silver  in  the  World,  1492-1895 4.01 


(iVoi!^.— Most  of  the  tables  in  the  body  of  the  book  are  repeated  in  this  part  for  con- 
venience of  reference.)  v 


CONTENTS. 

Monetary  Systems  and  Approximate  Stocks  of. Money  in  Principal 

Countries 4.02 

Products  of  Gold  and  Silver  from  Mines  in  the  U.  S.,  1873-95 4.04 

Average  Yearly  Wages  in  the  U.  S.  in  Manufacturing  Industries,  1860- 

1890 4.04 

Statement  of  Coin  and  Paper  Circulation  of  the  U.  S.,  1860-96 4.05 

Prices  of  Silver  Bullion  and  Bullion  Value  of  U-  S.  Silver  Dollars  since 

1873 4.06 

Commercial  Ratio  of  Silver  and  Gold  since  1687 4.07 

Comparative  Statement  of  Clearing  House  Exchanges  in  U.S.,  1892-95. .  4.08 

Transactions  of  the  N,  Y.  Clearing  House,  1860-95 4.08 

Coinage  of  U.  S.  Mints,  1792-1896   4.09 

Railroad  Freight  Earnings  and  Rates  per  Ton,  1873-95 4.09 

Crop  and  Yearly  Prices  of  Cotton,  1872-95 4.10 

Gold  Values  of  Wheat  per  Bushel,  1862-94 4.10 

Average  Farm  Prices  in  Illinois,  1863-94 4. 11 

Farm  Prices  in  Indiana,  1862-95 4.11 

Prices  of  Farm  Implements  in  Bushels  of  Grain,  1873  and  1889 4.11 

Freight  Rates  on  Wheat,  by  Lake,  Canal  and  Rail,  Chicago  to  N.  Y., 

1860-95 4.12 

Freight  Rates  on  Grain  and  Flour  from  St.  Louis,  1876-95 4. 12 

Time  Table  of  Procedure— The  Act  of  1873 4.18 

Prices,  Wages,  Purchasing  Power,  1845-90 4. 13 

Wages  in  U.  S.  and  Other  Countries 4. 14 

Diagram  showing  Prices  of  Silver,  Wheat,  Pork,  Freight,  Telegrams, 

etc.,  1873-1895 4.15 

Diagram  showing  Prices,  Wages  and  Purchasing  Power,  1860-90 4.16 


THE    NATIONAL    DEMOCRATIC    PARTY, 

Address  of  the  Executive  Committee. 

Chicago  August  17,  1896. 
To  the  Democrats  of  tJie  United  States  : 

The  Democratic  party  is  the  only  existing  political  organization  with  a 
history  extending  back  to  the  birth  of  the  Republic.  Party  after  party  has 
attempted  its  overthrow.  Some  have  achieved  temporary  triumphs.  "With 
each  triumph  was  heard  the  prophecy  that  the  Democratic  party  would  surely 
die.  It  has  survived  all  defeats.  By  virtue  of  its  indestructible  principles  it 
has  witnessed  the  birth  and  death  of  every  rival  save  one,  and  this,  its  present 
great  antagonist,  with  a  history  of  more  than  forty  years,  had  no  part  in  laying 
the  foundations  of  constitutional  government. 

For  more  than  a  century  men  of  high  principles,  noble  ambitions,  unselfish 
and  patriotic  aims  have  adhered  to  the  Democratic  party  with  a  constancy  of 
devotion  unparalleled  in  the  history  of  politics. 

For  more  than  a  century,  through  good  and  evil  report,  in  times  of  pros- 
perity and  in  days  of  adversity,  it  has  kept  its  faith.  "  Without  variableness 
or  shadow  of  turning,"  it  has  kept  fast  to  the  fundamental  principles  of  free 
government  formulated  by  its  founders  and  subsequently  enforced  by  its 
great  leaders,  from  Jefferson  to  Cleveland. 

For  more  than  a  century  no  man  was  ever  in  doubt  as  to  what  constituted 
Democracy.  He  who  proclaimed  himself  a  Democrat  defined  his  principles. 
He  believed,  and  this  was  the  cardinal  article  of  his  political  faith,  in  the 
ability  of  every  individual,  unassisted,  if  unfetterei  by  law,  to  achieve  his 
own  happiness,  and,  therefore,  that  to  every  citizen  there  should  be  secured 
the  right  and  opportunity  peaceably  to  pursue  whatever  course  of  conduct  he 
would,  provided  such  conduct  deprived  no  other  individual  of  the  equal 
enjoyment  of  the  same  right  and  opportunity.  He  stood  for  freedom  of  speech, 
freedom  of  conscience,  freedom  of  trade,  and  freedom  of  contract,  all  of 
which  are  implied  by  the  century-old  battle-cry  of  the  Democratic  party, 
"Individual  Liberty."  As  a  consequence,  every  Democrat  believed  in  the 
rule  of  law,  and  the  rule  of  an  impartial  law,  in  the  unhesitating  protection 
not  only  of  the  lives  of  citizens  but  of  private  rights  and  property,  and  in  the 
enforcement  of  obedience  to  duly  constituted  authority. 


ADDRESS. 


Every  true  Democrat  insisted  upon  a  strict  observance  of  the  mandates  of 
the  Federal  Constitutioa  and  of  the  limitations  therein  prescribed,  as  well  as 
upon  a  loyal  support  of  all  the  institutions  thereby  created  to  be  guaranties  of 
the  liberty  it  sought  to  perpetuate.  He  profoundly  disbelieved  in  the  ability 
of  government,  through  paternal  legislation  or  supervision,  to  increase  the 
happiness  of  the  nation.  He  was  opposed  to  all  attempts  to  conjure  comfort 
into  the  homes  of  its  citizens,  or  wealth  into  their  pockets.  He  believed  that 
it  is  the  function  of  government  to  provide  the  people  with  an  honest  and 
stable  medium  of  exchange,  thus  enabling  them  to  transact  their  business 
safely  and  conveniently  in  every  market  of  the  world.  He  reprobated  every 
attempt  to  supply  to  money  by  means  of  legislation  that  value  which  it  can 
possess  only  by  return  of  those  qualities  that  render  it  acceptable  to  the  world 
when  unsupported  by  legislative  I3at.  He  believed  in  the  greatest  measure  of 
freedom  of  trade  and  industry  compatible  with  the  necessity  to  obtain  by 
constitutional  means  an  adequate  revenue  for  the  support  of  the  Government. 
He  believed  in  a  simple,  economical,  honest  and  efficient  administration  of  the 
affairs  of  the  nation,  to  the  end  that  the  prime  object  of  government — the 
liberty  of  the  people — should  be  preserved  with  the  least  possible  resulting 
burden  and  the  greatest  possible  certainty. 

"With  such  a  record  and  such  a  creed,  the  President,  moreover,  being  a 
Democrat,  elected  on  a  platform  reaffirming  the  s  und  principles  of  Democ- 
racy, the  Democratic  Party  was  called  upon  to  select  delegates  to  a  National 
Convention. 

The  delegates  to  the  convention  held  at  Chicago  were  authorized  and  had 
the  power  to  proclaim  a  platform  embodying  their  views  of  the  true  solution 
of  the  particular  problems  of  government  now  agitating  the  nation,  but  upon 
the  condition  that  such  platform  should  be  consistent  with  the  cardinal  prin- 
ciples held  by  the  party  throughout  its  existence.  These  principles  constitute 
the  essential  element  of  the  party's  life.  They  distinguish  it  from  all  other 
political  organizations.  If  they  are  abandoned,  the  party  ceases  to  exist.  It 
was,  therefore,  not  within  the  power  of  any  majority  of  the  delegates  assem- 
bled at  Chicago  to  bind  the  Democrats  of  the  United  States  to  a  platform 
inconsistent  with  the  party's  principles  or  to  any  action  that  should  result  in 
their  surrender. 

In  violation  of  the  trust  committed  to  them,  a  majority  of  the  delegates 
assembled  in  that  convention,  ignoring  the  rights  of  the  minority,  unseated 
regularly-elected  delegates  to  make  places  for  others  in  sympathy  with  them- 
selves. They  proclaimed  a  sectional  combination  of  the  South  and  West 
against  the  North  and  East.  They  impeached  the  honesty  and  patriotism  of 
President  Cleveland,  who,  under  exceptional  embdSrrassments,  produced  by 
past  errors  of  legislation,  has  heroically  maintained  the  honor  and  integrity  of 
the  Republic.    Against  the  protest  of  one- third  of  the  delegates,  they  pro- 


ADDRESS. 


mulgated  a  platform  at  variance  with  the  essential  principles  of  the  Demo* 
cratic  party. 

This  platform  is  in  its  policies  dangerous  to  the  welfare  and  life  of  free 
government.  It  is  mischievous  in  its  tendencies.  But  even  more  threatening 
and  mischievous  was  the  spirit  of  the  convention  that  adopted  it — a  spirit  man- 
ifested not  alone  by  its  affirmative  action,  but  as  well  by  its  reckless  rejection 
of  every  proposition  tending  to  temper  the  declarations  of  the  convention  with 
conservatism  and  justice. 

The  platform  proposes  to  degrade  the  coin  of  the  United  States  by  means 
of  the  free,  unlimited  and  independent  coinage  of  silver  by  our  Government, 
and  by  the  exercise  of  the  power  of  the  nation  to  compel  the  acceptance  of 
depreciated  coins  at  their  nominal  value,  thereby  working  an  injustice  to 
creditors,  defrauding  the  laborer  of  a  large  part  of  his  earnings  and  savings, 
robbing  pensioned  soldiers  of  a  part  of  their  pensions,  contracting  the  cur- 
rency by  the  expulsion  of  gold  coin  from  circulation,  injuring,  if  not  destroy- 
ing, domestic  trade  and  foreign  commerce. 

While  professing  to  advocate  a  policy  of  bimetallism,  it  censures  the  pres- 
ent Democratic  administration  for  maintaining  the  parity  of  gold  and  silver. 
It  proposes  to  reduce  this  country  to  a  condition  of  silver  monometallism, 
with  its  vacillating  and  unreliable  standard  of  values,  and  tends  to  bring  the 
farmer,  the  wage-earner  and  the  salaried  man  to  the  wretched  condition  of  the 
same  classes  in  countries  in  which  the  silver  standard  prevails,  and  where 
the  rewards  of  agriculture  and  labor  are  lower  than  anywhere  else  in  the 
world. 

With  what  seems  to  be  a  deliberate  attempt  to  mislead  the  people,  it  asserts 
that  by  the  Coinage  Act  of  1873  the  United  States  abandoned  the  use  of  silver 
as  money,  and  that  gold  has  appreciated  and  commodities  have  fallen  in  price 
solely  by  reason  of  this  legislation.  It  ignores  the  fact  that  the  prices  of  com- 
modities have  fallen  because  of  the  enlarged  use  of  labor-saving  machinery, 
increased  production  and  resulting  competition.  It  suppresses  the  fact  that  a 
potent  reason  for  the  decline  in  the  price  of  silver  has  been  the  discovery  of 
new  and  cheaply-worked  mines,  resulting  in  an  enormous  increase  in  its  pro- 
duction. Instead  of  recognizing  these  facts,  it  appeals  to  the  prejudice  of  the 
people. 

It  demands  the  free  coinage  of  silver  at  the  arbitrary  and  fictitious  ratio  of 
16  to  1,  although  the  ratio  established  in  the  world's  market  is  about  32  to  1, 
and  although  neither  experience  nor  reason  warrants  the  belief  that  the  com- 
mercial ratio  between  the  metals  can  be  reduced  by  the  action  of  this  Govern- 
ment to  any  ratio  even  approximating  that  proposed. 

It  threatens,  in  certain  contingencies,  to  increase  to  an  unlimited  extent  the 
volume  of  legal  tenders  issued  by  the  Federal  Government,  the  ultimate  effect 
of  which  would  be  to  force  the  withdrawal  of  all  coin  from  circulation  and  to 


ADDEESS. 


compel  public  and  private  business  to  be  transacted  in  depreciated  paper  cur- 
rency, constantly  fluctuating  in  value,  and  to  invite  the  ruin  and  confusion 
tbat  have  always  followed  the  adoption  of  such  a  policy. 

Its  declarations  invite,  and  have  almost  produced,  a  financial  panic,  and 
many  of  its  proponents  announce  that  to  accomplish  their  purposes  they  are 
prepared  to  involve  their  country  in  a  disaster  comparable  to  nothing  in  its 
history  save  the  calamity  of  civil  war. 

It  assails  the  independence  of  the  judiciary  by  a  covert  threat  to  reorganize 
the  courts  whenever  their  decisions  contravene  the  decree  of  the  party 
caucus. 

It  seeks  to  allure  office  seekers  and  spoilsmen  to  its  support  by  attacking  the 
existing  Civil  Service  laws,  which  good  men  of  all  parties  have  labored  so  long 
to  establish  and  to  extend  to  all  departments  of  the  public  service. 

The  Chicago  Convention,  having  thus  departed  from  the  recognized  Demo- 
cratic faith  and  promulgated  doctrines  new  and  strange  to  the  Democracy,  all 
Democrats  are  absolved  from  obligation  to  support  its  programme.  More  than 
this,  as  the  doctrines  announced  are  destructive  of  national  honor  and  private 
obligation,  and  tend  to  create  sectional  and  class  distinctions  and  engender 
discord  and  strife  among  the  peop.e,  all  good  citizens  of  the  republic  are  bound 
to  repudiate  them  and  exert  every  lawful  means  to  insure  the  defeat  of  the 
candidates  that  represent  these  false  doctrines. 

Democrats  are  told  that  they  must  accept  the  platform  enunciated  and  the 
ticket  nominated  at  Chicago  because  submission  to  the  will  of  the  majority  is  a 
fundamental  principle  of  Democracy.  It  is  true  that  when  a  majority  of  the 
people  have  expressed  their  will  at  a  legal  election,  the  will  of  such  majority 
must  be  respected  and  obeyed.  This  is  essential  to  the  peace  and  existence  of 
the  Nation.  But  it  is  a  monstrous  perversion  of  this  doctrine  to  apply  it  to  a 
political  party,  which  exists  only  by  virtue  of  a  common,  voluntary  assent  to 
its  principles.  When  a  Democratic  convention  departs  from  the  principles  of 
the  party  no  Democrat  remains  under  any  moral  obligation  to  support  its 
action,  nor  is  there  any  tradition  of  the  party  that  requires  him  so  to  do.  On 
the  contrary,  it  is  evidence  of  moral  weakness  for  any  freeman  to  vote  to 
enforce  policies  which,  in  his  opinion,  are  inimical  to  the  welfare  of  the 
people  or  to  the  integrity  of  the  Nation. 

The  duty  of  the  hour  is  to  stand  steadfast  in  the  defense  of  our  ancient 
faith.  In  this  crisis  there  is  at  stake  more  than  the  possibility  of  temporary 
victory.  The  honor  and  perpetuity  of  the  Democratic  party  are  at  stake.  A 
political  organization  that  is  untrue  to  itself,  its  principles,  its  history  and 
traditions,  is  disgraced  and  dishonored.  The  existence  of  our  great  historical 
party,  that  has  withstood  the  assaults  of  every  foe,  is  threatened  by  reason  of 
the  recreancy  of  many  of  its  members.  That  this  party,  as  we  have  known  it, 
may  not  die,  let  the  faithful  of  years  rally  round  its  historic  banner,  re-form  its 

4 


ADDRESS. 


broken  lines,  and,  with  abiding  faith  in  the  final  triumph  of  its  principles, 
unite  to  restore  the  name  "  Democrat  "  to  its  former  meaning  and  proud  dis- 
tinction. 

To  this  end  we  request  all  Democrats  who  are  opposed  to  the  platform 
adopted  and  the  candidates  nominated  at  Chicago  to  organize  in  their  respective 
States  and  to  send  representatives  to  the  convention  of  the  National  Democratic 
party  to  be  held  at  Indianapolis  on  Wednesday,  September  2,  1896,  in  accord- 
ance with  the  call  heretofore  issued  by  the  National  Committee. 

W.  D.  Bynum,  Chairman  ;  Ellis  B.  Usher, 

John  R.  Wilson,  Secretary  ;  S.  H.  Holding, 

Charles  Tracey,  F.  W.  Lehman, 

J.  M.  Falkner,  W.  B.  Haldeman, 

F.  W.  M.  Cutcheon,  John  P.  Hopkins, 

Executive  Committee  of  the  National  Democratic  Party 


THE    NATIONAL    DEMOCRATIC    PLATFORM. 

ADOPTED  AT  THE    CONVENTION    OP     THE    NATIONAL,    DEMOCRATIC   PARTY  AT 
INDIANAPOLIS,    IND.,    SEPTEMBER  3,    1896. 

This  convention  has  assembled  to  uphold  the  principles  upon  which  de- 
pend the  honor  and  welfare  of  the  American  people  in  order  that  Democrats 
throughout  the  Union  may  unite  their  patriotic  efforts  to  avert  disaster  from 
their  country  and  ruin  from  their  party.  The  Democratic  party  is  pledged  to 
equal  and  exact  justice  to  all  men  of  every  creed  and  condition ;  to  the  largest 
freedom  of  the  individual  consistent  with  good  government  ;  to  the  preserva- 
tion of  the  Federal  Government  in  its  constitutional  vigor  and  the  support  of 
the  States  in  all  their  just  rights  ;  to  economy  in  the  public  expenditures  ;  to 
the  maintenance  of  the  public  faith  and  sound  money ;  and  it  is  opposed  to 
paternalism  and  all  class  legislation. 

The  declarations  of  the  Chicago  Convention  attack  individual  freedom,  the 
right  of  private  contract,  the  independence  of  the  judiciary,  and  the  authority 
of  the  President  to  enforce  Federal  laws.  They  advocate  a  reckless  attempt  to 
increase  the  price  of  silver  by  legislation  to  the  debasement  of  our  monetary 
standard,  and  threaten  unlimited  issues  of  paper  money  by  the  Government. 
They  abandon  for  Republican  allies  the  Democratic  cause  of  tariff  reform  to 
court  the  favor  of  protectionists  to  their  fiscal  heresy. 

In  view  of  these  and  other  grave  departures  from  Democratic  principles, 
we  cannot  support  the  candidates  of  that  convention,  nor  be  bound  by  its  acts. 
The  Democratic  parly  has  survived  many  defeats,  but  could  not  survive  a 
victory  won  in  behalf  of  the  doctrine  and  the  policy  proclaimed  in  its  name  at 
Chicago. 

The  conditions,  however,  which  make  possible  such  utterances  from  a 
national  convention  are  a  result  of  class  legislation  by  the  Republican  party. 
It  still  proclaims,  as  it  has  for  years,  the  power  and  duty  of  the  Government 
to  raise  and  maintain  prices  by  law  ;  and  it  proposes  no  remedy  for  existing 
evils  except  oppressive  and  unjust  taxation. 

THE  CONTINUITY   OF    DEMOCRATIC  PRINCIPLES. 

The  National  Democracy,  here  convened,  therefore  renews  its  declaration 
of  faith  in  Democratic  principles,  especially  as  applicable  to  the  conditions  of 
the  times. 

Taxation,  tariff,  excise  or  direct,  is  rightfully  imposed  only  for  public  pur- 
poses and  not  for  private  gain.  Its  amount  is  justly  measured  by  public  ex- 
penditures, which  should  be  limited  by  scrupulous  economy.  The  sum  de- 
rived by  the  Treasury  from  tariff  and  excise  levies  is  affected  by  the  state  of 

C 


PLATFORM. 


trade  and  volume  of  consumption.  The  amount  required  by  the  Treasury  is 
determined  by  the  appropriations  made  by  Congress. 

The  demand  of  the  Republican  party  for  an  increase  in  tariff  taxation  has 
its  pretext  in  the  deficiency  of  revenue,  which  has  its  causes  in  the  stagnation 
of  trade  and  reduced  consumption,  due  entirely  to  the  loss  of  confidence  that 
has  followed  the  Populist  threat  of  free  coinage  and  the  depreciation  of  our 
money,  and  the  Republican  practice  of  extravagant  appropriations  beyond  the 
needs  of  good  government. 

We  arraign  and  condemn  the  Populistic  conventions  of  Chicago  and  St. 
Louis  for  their  co-operation  with  the  Republican  party  in  creating  these  con- 
ditions which  are  pleaded  in  justification  of  a  heavy  increase  of  the  burdens  of 
the  people  by  a  further  resort  to  protection. 

We  therefore  denounce  protection  and  especially  free  coinage  of  silver,  as 
schemes  for  the  personal  profit  of  a  few  at  the  expense  of  the  masses,  and 
oppose  the  two  parties  which  stand  for  these  schemes  as  hostile  to  the  people 
of  the  Republic,  whose  food  and  shelter,  comfort  and  prosperity,  are  attacked  by 
higher  taxes  and  depreciated  money. 

In  fine,  we  reaffirm  the  historic  Democratic  doctrine  of  tariff  for  reve- 
nue only.  We  demand  that  henceforth  modern  and  liberal  policies  toward 
American  shipping  shall  take  the  place  of  our  imitation  of  the  restricted  statutes 
of  the  eighteenth  century,  which  were  long  ago  abandoned  by  every  maritime 
power  but  the  United  States,  and  which,  to  the  nation's  humiliation,  have 
driven  American  capital  and  enterprise  to  the  use  of  alien  flags  and  alien 
crews,  have  made  the  stars  and  stripes  an  almost  unknown  emblem  in.  foreign 
ports,  and  have  virtually  extinguished  the  race  of  American  seamen.  We 
oppose  the  pretense  that  discriminating  duties  will  promote  shipping ;  that 
scheme  is  an  invitation  to  commercial  warfare  upon  the  United  States,  un- 
American  in  the  light  of  our  great  commercial  treaties,  offering  no  gain  what- 
ever to  American  shipping,  while  greatly  increasing  ocean  freights  on  our 
agricultural  and  manufactured  products. 

GOLD  AND   SILVER    IN  THE  CURRENCY. 

The  experience  of  mankind  has  shown  that,  by  reason  of  its  natural 
qualities,  gold  is  the  necessary  money  of  the  large  affairs  of  commerce  and 
business,  while  silver  is  conveniently  adapted  to  minor  transactions,  and  the 
most  beneficial  use  of  both  together  can  be  insured  only  by  the  adoption  of  the 
former  as  a  standard  of  monetary  measure,  and  the  maintenance  of  silver  at 
a  parity  with  gold  by  its  limited  coinage  under  suitable  safeguards  of  law.  Thus 
the  largest  possible  employment  of  both  metals  is  gained,  with  a  value  univer- 
sally accepted  throughout  the  world,  which  involves  the  only  practical 
bimetallic  currency  assuring  the  most  stable  standard,  and  especiaHy  the  best 
and  safest  money  for  all  who  earn  a  livelihood  by  labor  or  the  product  of 


PLATFORM. 


liusbaudry.  They  cannot  suffer  when  paid  in  the  best  money  known  to  man, 
but  are  the  peculiar  and  most  defenseless  victims  of  a  debased  and  fluctu- 
ating currency,  which  offers  continual  profits  to  the  money  changer  at  their 
cost. 

Realizing  these  truths,  demonstrated  by  long  public  inconvenience  and  loss, 
the  Democratic  party,  in  the  interests  of  the  masses  and  of  equal  justice  to  all, 
practically  established  by  the  legislation  of  1834  and  1853  the  gold  standard  of 
monetary  measurement,  and  likewise  entirely  divorced  the  Government  from 
banking  and  currency  issues.  To  this  long-established  Democratic  policy  we 
adhere,  and  insist  upon  the  maintenance  of  the  gold  standard  and  of  the  parity 
therewith  of  every  dollar  issued  by  the  Government,  and  are  firmly  opposed  to 
the  free  and  unlimited  coinage  of  silver  and  to  the  compulsory  purchase  of 
silver  bullion.  But  we  denounce  also  the  further  maintenance  of  the  present 
costly  patchwork  system  of  national  paper  currency  as  a  constant  source  of 
injury  and  peril. 

We  assert  the  necessity  of  such  intelligent  currency  reform  as  will  confine 
the  Government  to  its  legitimate  functions,  completely  separated  from  the 
banking  business,  and  afford  to  all  sections  of  our  country  a  uniform,  safe, 
and  elastic  bank  currency  under  governmental  supervision,  measured  in 
volume  by  tlie  needs  of  business. 

PRESIDENT  Cleveland's  administration. 

The  fidelity,  patriotism  and  courage  with  which  President  Cleveland  has 
fulfilled  his  great  public  trust,  the  high  character  of  his  administration,  his 
wisdom  and  energy  in  the  maintenance  of  civil  order  and  the  enforcement  of 
the  laws,  its  equal  regard  for  the  rights  of  every  class  and  every  section,  its 
firm  and  dignified  conduct  of  foreign  affairs  and  its  sturdy  persistence  in  up- 
holding the  credit  and  honor  of  the  nation,  are  fully  recognized  by  the  Demo- 
cratic party  and  will  secure  to  him  a  place  in  history  beside  the  fathers  of  (he 
republic. 

We  also  commend  the  administration  for  the  great  progress  made  in  the 
reform  of  the  public  service,  and  we  indorse  its  effort  to  extend  the  merit  sys- 
tem still  further.  We  demand  that  no  backward  step  be  taken,  but  that  the 
reform  be  supported  and  advanced  until  the  undemocratic  spoils  system  of 
appointments  shall  be  eradicated. 

ECONOMY,    PEACE,    JUSTICE:  AND   LAW. 

We  demand  strict  economy  in  the  appropriations  and  in  the  administra- 
tion of  the  government. 

We  favor  arbitration  for  the  settlement  of  international  disputes. 

We  favor  a  liberal  policy  of  pensions  to  the  deserving  soidiei"s  and  sailors 
of  the  United  States. 

8 


PLATFORM. 


The  Supreme  Court  of  the  United  States  was  wisely  established  by  the 
framers  of  our  Constitution  as  one  of  three  co-ordinate  branches  of  the  govern- 
ment. Its  independence  and  authority  to  interpret  the  law  of  the  land  without 
fear  or  favor  must  be  maintained.  We  condemn  all  efforts  to  degrade  that  tri- 
bunal or  impair  the  confidence  and  respect  which  it  has  deservedly  held. 

The  Democratic  party  ever  has  maintained,  and  ever  will  maintain,  the 
supremacy  of  law,  the  independence  of  its  judicial  administration,  the  in- 
violability of  contract,  and  the  obligations  of  all  good  citizens  to  resist  every 
illegal  trust,  combination  or  attempt  against  the  just  rights  of  property  and 
the  good  order  of  society,  in  which  are  bound  up  the  peace  and  happiness  of 
our  people. 

Believing  these  principles  to  be  essential  to  the  well-being  of  the  public, 
we  submit  them  to  the  consideration  of  the  American  people. 


TIJE    PLATFORMS    COMPARED. 


TRUE  AND  FALSE  DEMOCRACY 


The  True  Doctrine. 


From  the  National  Democratic  plat- 
form adopted  at  Chicago  June  22, 
1892. 

We  denounce  the  Republican  legis- 
lation known  as  the  Sherman  Act  of 
1890  as  a  cowardly  makeshift,  fraught 
with  possibilities  of  danger  in  the  fu- 
ture, which  should  make  all  of  its  sup- 
porters, as  well  as  its  author,  anxious 
for  its  speedy  repeal.  We  hold  to  the 
use  of  both  gold  and  silver  as  the 
standard  money  of  the  country  and  to 
the  coinage  of  both  gold  and  silver 
without  discriminating  against  either 
metal  or  charge  for  mintage,  but  the 
dollar  unit  of  coinage  of  both  metals 
must  be  of  equal  intrinsic  and  ex- 
changeable value  or  be  adjusted 
through  international  agreement  or 
by  such  safeguards  of  legislation  as 
shall  insure  the  maintenance  of  the 
parity  of  the  two  metals  and  the 
equal  power  of  every  dollar  at  all 
times  in  the  markets  and  in  the  pay- 
ments of  debt ;  and  we  demand  that 
all  paper  currency  shall  be  kept  at  par 
with  and  redeemable  in  such  coin. 
We  insist  upon  this  policy  as  especial- 
ly necessary  for  the  protection  of  the 
farmers  and  laboring  classes,  the  first 
and  most  defenseless  victims' of  unsta- 
ble money  and  a  fluctuating  currency. 


From  the  platform  of  the  National 
Democracy,  adopted  at  Indianapo- 
lis September  d,  1896. 

The  experience  of  mankind  has 
shown  that  by  reason  of  their  natural 
qualities,  gold  is  the  necessary  money 
of  the  large  affairs  of  commerce  and 
business,  while  silver  is  conveniently 
adapted  to  minor  transactions,  and 
the  most  beneficial  use  of  both  to- 
gether can  be  ensured  only  by  the 
adoption  of  the  former  as  a  standard 
of  monetary  measure,  and  the  main- 


tenance of  silver  at  a  parity  with  gold 
by  its  limited  coinage  under  suitable 
safeguards  at  law. 

Thus  the  largest  possible  enjoyment 
of  both  metals  is  gained  with  a  value 
universally  accepted  throughout  the 
world,  which  constitutes  the  only 
practical  bimetallic  currency,  assur- 
ing the  most  stable  standard,  and  es- 
pecially the  best  and  safest  money 
for  all  who  earn  their  livelihood  by 
labor  or  the  produce  of  husbandry. 
They  cannot  suffer  when  paid  in  the 
best  money  known  to  man,  but  are 
the  peculiar  and  most  defenseless  vic- 
tims of  a  debased  and  fluctuating 
currency  which  offers  continual  prof- 
its to  the  money  changer  at  their  cost. 

Realizing  the  truths  demonstrated 
by  long  and  public  inconvenience  and 
loss,  the  Democratic  party,  in  the  in- 
terests of  the  masses  and  of  equal  jus- 
tice to  all,  practically  established  by 
the  legislation  of  1834  and  1853  the 
gold  standard  of  monetary  measure- 
ment and  likewise  entirely  divorced 
the  Government  from  banking  and 
currency  issues.  To  this  long  estab- 
lished Democratic  policy  we  adhere, 
and  insist  upon  the  maintenance  of 
the  gold  standard,  and  of  the  parity 
therewith  of  every  dollar  issued  by 
the  Government ;  and  are  firmly  op- 
posed to  the  free  and  unlimited  coin- 
age of  silver,  and  to  the  compulsory 
purchase  of  silver  bullion.  But  we 
denounce  also  the  further  mainte- 
nance of  the  present  costly  patchwork 
of  national  paper  currency  as  a  con- 
stant source  of  injury  and  peril. 

We  assert  the  necessity  of  such  in- 
telligent currency  reform  as  will  con- 
fine the  Government  to  its  legitimate 
functions,  completely  separated  from 
the  banking  business,  and  afford  to 
all  sections  of  our  country  aimiform, 
safe  and  elastic  bank  currency  under 
governmental  supervision,  measured 
in  volume  by  the  needs  of  business. 


10 


THE    PLATFORMS    COMPARED. 


ON  THE  MONEY  QUESTION. 

The  False  Doctrine. 


From  the  so-called  JSfational  Demo- 
cratic platform  adopted  at  Chi- 
cago, July  9,  1896. 

We  declare  that  the  Act  of  1873,  de- 
monetizing silver  without  the  knowl- 
edge or  approval  of  the  American 
people,  has  resulted  in  the  apprecia- 
tion of  gold  and  a  corresponding  fall 
in  the  prices  of  commodities  produced 
by  the  people,  a  heavy  increase  in  the 
burden  of  taxation  and  of  all  debts 
public  and  private,  the  enrichment  of 
the  money-lending  class  at  home  and 
abroad,  prostration  of  industry  and 
impoverishment  of  the  people. 

We  are  unalterably  opposed  to  the 
single  gold  standard,  which  has 
locked  fast  the  prosperity  of  an  in- 
dustrial people  in  the  paralysis  of 
hard  times.  Gold  monometallism  is  a 
British  policy,  and  its  adoption  has 
brought  other  nations  into  financial 
servitude  to  London.  It  is  not  only 
im- American,  but  anti-American,  and 
it  can  be  fastened  on  the  United  States 
only  by  the  stifling  of  that  indomi- 
table spirit  and  love  of  liberty  which 
proclaimed  our  political  independence 
in  1776  and  won  it  in  the  War  of  the 
Revolution. 

We  demand  the  free  and  unlimited 
coinage  of  both  gold  and  silver  at  the 
present  legal  ratio  of  16  to  1  without 
waiting  for  the  aid  or  consent  of  any 
other  nation.  We  demand  that  the 
standard  silver  dollar  shall  be  a  full 
legal  tender,  equally  with  gold,  for  all 
debts,  public  and  private,  and  we 
favor  such  legislation  as  will  prevent 
the    demonetization    of  any  kind  of 


legal  tender  money  by  private  con- 
tract. 

Congress  alone  has  the  power  to 
coin  and  issue  money,  and  President 
Jackson  declared  that  this  power 
could  not  be  delegated  to  corporations 
or  individuals.  We  therefore  demand 
that  the  power  to  issue  notes  to  cir- 
culate as  money  be  taken  from  the 
national  banks  and  that  all  paper 
money  shall  be  issued  directly  by  the 
Treasury  Department. 


From  the  platform  of  the  People  h  Party 
adopted  at  St.  Louis  July  24, 1896. 

We  demand  a  national  money, 
safe  and  sound,  issued  by  the  General 
Government  only,  without  the  inter- 
vention of  banks  of  issue,  to  be  a  full 
legal  tender  for  all  debts,  public  and 
private,  a  just,  equitable  and  efficient 
means  of  distribution  direct  to  the 
people  and  through  the  lawful  dis- 
bursements of  the  Government. 

We  demand  the  free  and  unre- 
stricted coinage  of  silver  and  gold  at 
the  present  legal  ratio  of  16  to  1 ,  with- 
out waiting  for  the  consent  of  foreign 
nations.   " 

We  demand  that  the  volume  of 
circulating  medium  be  speedily  in- 
creased to  an  amount  sufficient  to 
meet  the  demands  of  the  business  and 
population,  and  to  restore  the  just 
level  of  prices  of  labor  and  produc- 
tion. 

We  demand  such  legislation  as  will 
prevent  the  demonetization  of  the 
lawful  money  of  the  United  States 
by  private  contract. 


11 


THE    CANDIDATES. 

For  President,  John  M.  Palmer. 

John  McCauley  Palmer  was  born  in  Eagle  Creek,  Scott  County,  Ken- 
tucky, September  13,  1817.  When  he  was  fifteen  years  old,  his  father 
removed  to  the  State  of  Illmois,  settling  at  Carlingville,  in  Macoupin 
C/Ounty.  The  family  did  not  prosper,  and  two  years  later  the  father 
gave  John  "his  time,"  which  meant  in  the  vernacular  of  those  days  liberty 
to  shift  for  himself.  John  Palmer  was  then  seventeen  years  old.  His  first 
ambition  was  for  a  higher  education  than  he  had  been  able  to  obtain  in  the 
country  schools,  and  he  sought  it  in  a  school  at  Alton  where  pupils  were  per- 
mitted to  pay  their  way  with  manual  labor.  The  young  student's  greatest 
difficulty  was  to  keep  himself  decently  clothed.  It  was  an  unequal  struggle, 
and  ended  in  his  leaving  the  school  in  debt.  This  debt  he  shortly  after  paid 
with  money  earned  in  the  making  of  fiour  barrels,  he  having  quickly  learned 
the  cooper's  trade. 

The  young  man's  next  venture  was  in  peddling  clocks.  He  was  intrusted 
with  the  driving  of  ony  of  several  peddlers'  wagons  maintained  by  a  Yankee 
peddler  from  Connecticut.  The  turning  point  in  his  life  came  while  thus  en- 
gaged. One  night  he  vainly  sought  lodging  at  a  crowded  hotel  in  Carthage  until 
Stephen  A.  Douglas,  then  on  a  stumping  tour  in  a  congressional  campaign, 
offered  to  share  his  room  with  him.  Douglas  engaged  him  in  conversation, 
and  finding  him  fairly  well  educated  and  of  a  well-balanced  intellect,  advised 
him  to  abandon  trade  and  to  study  law.  The  advice  was  taken,  and  after 
surmounting  many  difficulties  Mr.  Palmer  was  admitted  to  the  bar  in  1839. 
His  entry  into  politics  followed  quickly,  the  campaign  of  1840  finding  him 
fighting  with  Douglas  against  the  whigs.  His  first  office  was  the  probate 
judgeship  of  Macoupin  County,  to  which  he  was  elected  in  1843.  He  held  the 
office  through  successive  terms  until  1847,  when  he  was  defeated  because  of 
his  anti-slavery  convictions,  to  which  he  had  given  vigorous  expression  in  the 
Illinois  Constitutional  Convention  of  1846,  where  he  opposed  the  adoption  of 
an  article  to  prohibit  free  negroes  from  entering  Illinois.  His  personal  popu- 
larity conquered  prejudice,  however,  and  in  1348  he  was  re-elected  to  the 
office,  and  in  the  following  year  he  was  chosen  County  Judge. 

In  1851  Mr.  Palmer  was  sent  to  the  State  Senate,  where  he  again  distin- 
guished himself  as  an  opponent  of  slavery  by  fighting  against  the  bill  to 
prohibit  negro  immigration.  He  continued,  however,  in  full  fellowship  with 
the  Democratic  party,  and  in  1853  was  selected  to  renominate  Stephen  A. 
Douglas  for  United  States  Senator.  Soon  thereafter,  however,  came  his 
break  with  Douglas.    The  latter  endeavored  to  make  support  of  the  Kansas- 

12 


THE   CANDIDATES. 


Nebraska  act  a  test  of  Democratic  fealty.  Palmer  spurned  the  test  and  ran  as 
an  independent  cadidate  in  his  legislative  district,  defeating  the  Douglas  can- 
didate. He  and  the  other  anti-Nebraska  Democrats  held  the  balance  of  power 
in  the  Legislature,  which  had  the  choice  of  a  United  States  Senator  to  succeed 
Shields.  It  appearing  that  defections  from  the  independents  might  give 
Shields  the  election,  Palmer  sprung  the  name  of  Lyman  Trumbull,  an  inde- 
pendent Democrat,  who  was  elected  with  the  aid  of  the  forty-eight  votes 
thrown  to  him  by  Abraham  Lincoln. 

"When  Mr.  Palmer  severed  relations  with  Mr.  Douglas,  he  also  severed  con- 
nection with  the  Democratic  party.  He  was  one  of  the  founders  of  the 
Republican  party,  and  was  chairman  of  the  first  state  convention  of  that 
party  in  Illinois.  Then  came  the  national  convention  of  the  party  in  Phila- 
delphia, to  which  Palmer  was  a  delegate.  Returning  home,  he  refused  a 
nomination  as  Representative  in  Congress,  and  took  the  stump  for  Fremont. 
He  had  to  face  the  most  violent  partisan  abuse.  In  a  debate  with  Major  Har- 
ris at  Plainview  he  was  constrained  to  meet  some  of  Harris's  scurrilous 
remarks  with  the  word  "  liar,"  and  then  to  face  Harris's  irate  friends  with  a 
pistol  in  his  hand.  When  it  came  his  time  to  speak,  the  crowd  tried  to  howl 
him  dowQ.  In  a  voice  which  rose  above  the  howls,  Palmer  told  the  "  cow- 
ardly scoundrels  "  that  they  had  listened  while  he  was  being  maligned  and 
that  now  they  must  listen  to  him.  The  demand  was  effective  and  the  crowd 
heard  him  to  the  end.  After  Fremont's  defeat  Mr.  Palmer  ran  as  a  candidate 
for  Representative  from  his  Congress  district,  but  was  defeated. 

In  the  campaign  in  which  Lincoln  was  elected,  Palmer  was  an  elector-at- 
large  in  Illinois.  He  returned  from  the  peace  conference  in  Washington  in 
1861  to  raise  the  Fourteenth  Illinois  Regiment,  of  which  he  was  made  Colonel. 
A  few  months  later  he  was  made  a  Brigadier-General,  and  eventually  he  became 
a  Major-General  of  volunteers.  He  was  with  Gen.  Pope  in  the  capture  of  New 
Madrid  and  Island  No.  10,  commanding  the  First  Brigade,  First  Division  of  the 
Army  of  the  Mississippi,  and  later  a  division  of  Gen.  Grant's  army,  leading  a 
division  at  the  battle  of  Stony  River.  He  also  participated  in  the  battle  of  Cliick- 
amauga  and  the  Atlanta  campaign.  One  year  after  the  war  he  was  a  candi- 
date for  United  States  Senator  from  Illinois,  but  was  defeated  by  John  A. 
Logan.  The  next  year  he  was  elected  Governor  of  the  state,  which  ofiice  he 
filled  for  four  years,  declining  a  renomination,  in  1872,  on  the  ground  that 
the  convention  would  be  controlled  by  men  whose  leading  object  would  be 
the  renomination  of  President  Grant.  He  opposed  Grant's  re-election,  and 
has  since  that  time  acted  with  the  Democrats.  One  of  the  leading  causes  of 
Mr.  Palmer's  opposition  to  Grant  was  because  the  President  had  permitted 
General  Sheridan  to  use  four  companies  of  United  Stales  soldiers  as  police  after 
the  great  fire  in  Chicago,  thus  reflecting  upon  the  ability  of  the  state  to 
maintain  order.    And  so  Mr.  Palmer  supported  Greeley. 


13 


THE    CANDIDATES. 


Governor  Palmer  was  at  the  Liberal  Republican  convention  in  Cincinnati 
and  objected  even  to  a  mention  of  his  name  as  a  presidential  candidate.  He 
was  importuned  so  persistently  for  a  declaration  of  his  principles  that  he 
finally  said:  "  I  will  make  no  pledges,  promises  or  declarations  of  princi- 
ples or  purposes  to  secure  a  presidential  nomination."  He  gave  a  hearty  sup- 
port to  Horace  Greeley  and  took  the  stump  in  his  behalf.  In  1872,  when  the 
Liberal  and  Democratic  parties  in  Illinois  were  fused,  Governor  Palmer 
became  a  recognized  Democratic  leader,  and  was  at  once  the  champion  of  hard 
money,  urging  the  adoption  of  a  hard-money  platform  in  the  coming  state 
convention.  On  August  26  the  convention  met  and  Governor  Palmer  was 
made  chairman,  and  in  a  powerful  speech  he  advocated  his  views.  A  model 
hard-money  and  State's  rights  platform  was  the  result,  and  the  party  went 
before  the  people.  But  the  independent  and  prohibition  vote  of  75,000  stepped 
in  between  and  gave  the  Republicans  a  plurality  of  34,805. 

Since  then  General  Palmer  has  been  a  Democrat,  and  was  elected  to  the 
State  Senate  by  that  party  in  1877.  In  1890  he  was  elected  United  States  Sena- 
tor from  Illinois,  which  position  he  still  holds. 

For  Vice-President,  Simon  B.  Buckner. 

Simon  Bolivar  Buckner  was  bred  a  soldier  and  is  now  a  farmer.  No  better 
representative  of  that  sturdy  yeomanry  for  which  Kentucky,  like  England,  is 
celebrated,  has  ever  been  offered  to  the  world.  Unostentatioua  in  his  manner 
of  hving  and  holding  himself  in  no  respect  above  his  neighbors,  Gen.  Buckner 
is  one  of  the  moat  finished  gentlemen  in  America  ;  he  is  "a  scholar  and  a  ripe 
and  good  one."  He  has  distinguished  himself  as  a  statesman,  but  he  was  never 
an  office-seeker. 

Gen.  Buckner  was  born  in  Hart  County  in  1823,  on  the  farm  and  in  the 
house  in  which  he  now  lives.  His  father  was  one  of  the  first  iron  manufactu- 
rers of  the  State,  and  built  and  operated  the  Clay  Furnace,  on  Green  river,  only 
a  short  distance  from  the  family  residence.  He  was  a  member  of  a  Virginia 
family  of  English  descent,  and  was  a  man  of  means  and  standing.  During  his 
son's  early  life  he  moved  to  Munfordville,  where  Simon  received  the  rudiments 
of  his  education.  The  schools  of  that  day  were  much  better  than  many  now 
believe,  as  the  teachers  were  usually  graduates  of  Virginia  or  Eastern  colleges. 

The  elder  Buckner  moved  to  Muhlenberg  County  later,  and  from  there  his 
son  was  given  a  cadetship  to  West  Point.  Simon  Bolivar's  record  was  a  good 
one,  and  when  he  was  graduated  in  1844  he  was  assigned  to  the  Second  In- 
fantry regiment.  In  August,  1845,  he  was  made  Assistant  Prof  essor  of  Ethics  at 
West  Point,  at  which  post  he  remained  until  the  following  May.  Upon  the 
breaking  out  of  the  war  with  Mexico  he  applied  for  transfer  to  the  scene  of 
operations.  This  was  delayed,  but  he  reached  Mexico  in  time  to  take  a  very 
active  part  ia  that  brief  but  brilliant  conflict.     He  was  attached  to  the  Sixth 

14 


THE    CANDIDATES. 


Regiment,  and  was  breveted  first  lieutenant  for  gallantry  at  Contreras  and 
Cherubusco.     At  Molino  del  Rey  he  won  the  captain's  brevet. 

After  the  war  lie  was  an  instructor  at  West  Point  for  some  time,  then 
served  on  the  frontier  among  the  Indians.  He  resigned  March  25,  1855,  and 
during  that  year  superintended  the  building  of  the  Chicago  Custom-house.  Re- 
turning to  Louisville  he  took  an  interest  in  militia  matters,  and  Gov.  Magoffin 
appointed  him  Adjutarit  and  Inspector  General  of  the  State  Guard.  He 
organized  the  Guard  and  brought  it  to  a  high  state  of  efficiency,  showing  his 
great  executive  ability  in  the  work. 

When  the  war  broke  out  every  effort  was  made  by  the  Federal  authorities 
to  secure  Gen.  Buckner  for  the  Union.  He  was  then  in  the  prime  of  a  hand- 
some young  manhood,  confessedly  an  able  soldier  and  of  the  greatest  personal 
influence  in  his  State.  The  most  tempting  offers  were  made  him — a  general's 
commission  and  promises  of  high  command — but  all  were  refused.  He  felt  that 
he  should  go  with  the  South,  and,  though  all  his  property  lay  in  the  North,  he 
went  as  conscience  dictated.  A  large  part  of  the  State  Guard  followed  their 
commander. 

Gen.  Buckner  invaded  Kentucky  from  Camp  Boone  and  threatened  Louis- 
ville, but  advanced  no  farther  than  Bowling  Green.  From  there  he  went  to 
Fort  Donelson,  where  the  incapacity  of  his  superior  officers.  Gens.  Pillow  and 
Floyd,  forced  him  to  choose  between  abandoning  his  men  or  surrendering  them. 
He  first  commanded  a  brigade,  and  distinguished  himself  in  the  battles  of  Feb- 
ruary 13,  14  and  15.  On  the  last  day  a  gallant  sortie  was  made,  the  Federals 
were  driven  back  and  the  way  was  opened  for  the  army's  escape,  but  Gen.  PQ- 
low  ordered  them  back.  Gen.  Buckner  protested,  but  was  overruled.  That 
afternoon  Gen.  Grant  so  arranged  his  forces  that  retreat  was  cut  off.  A  confer- 
ence was  held  in  the  evening  and  Gens.  Floyd  and  Pillow  announced  that  as 
they  would  probably  be  hanged  if  captured  they  would  make  their  escape  by 
river  that  night.  Gen.  Buckner  would  not  hear  to  leaving  their  troops,  so 
the  command  was  turned  over  to  him.  Floyd  and  Pillow  made  good  their 
flight ;  Buckner  remained  to  undergo  the  mortification  of  the  inevitable  sur- 
render, 

A  pleasant  incident  was  the  conduct  of  the  Union  General,  who  privately 
placed  his  purse  at  his  old  friend's  disposal.  They  were  cadets  together  at 
West  Point.  They  had  scarcely  met  since  then,  except  on  a  visit  by  Gen. 
Grant  to  New  York,  when  Grant  had  left  the  array  and  Buckner  was  on  staff 
duty  in  that  city  and  was  able  to  do  a  kindly  favor  for  his  West  Point  friend. 
They  did  not  meet  again  till  Gen.  Grant  was  dying  at  Mount  Macgregor,  when 
Gen.  Buckner  called  to  give  thanks  to  the  great  Union  leader  for  the  stout  and 
successful  resistance  he  had  made  to  Andrew  Johnson's  intention  to  try  the 
Confederate  Generals  for  treason,  after  their  parole  had  been  accepted  and  had 
been  honorably  maintained.     The  association  of  Gen,  Buckner  and  Gen.  John- 

15 


THE   CANDIDATES. 


ston  as  pall-bearers  at  Gen.  Grant's  funeral  was  one  of  the  first  proofs  of  the 
reconciliation  that  is  now  complete  between  North  and  South. 

After  his  surrender  the  young  Confederate  was  sent  to  Fort  Warren,  Boston, 
where  he  remained  until  exchanged  in  August  of  that  year.  He  was  then  given 
the  command  of  the  First  Division  of  Gen.  Hardee's  corps  in  Bragg's  army. 
He  was  made  a  Major  General,  and  distinguished  himself  in  the  battles  of 
Murfreesboro  and  Chickamauga.  As  Lieutenant  General  he  succeeded  to  the 
command  of  Kirby  Smith's  army  which  he  surrendered  at  Baton  Rouge  May 
26,  1865. 

Like  all  other  Southern  soldiers,  Gen.  Buckner  found  himself  practically  re- 
duced to  poverty  by  the  war.  He  owned  valuable  property  in  Chicago,  which 
he  had  deeded  to  his  brother-in-law,  Lieut.  Kingsbury,  of  the  Federal  Army,  to 
save  it  from  confiscation  at  the  breaking  out  of  hostilities.  Lieut.  Kingsbury 
was  mortally  wounded  in  battle,  though  he  made  a  nuncupative  will  bequeathing 
the  property  back  to  Gen.  Buckner.  It  took  many  years  of  litigation  to  establish 
the  claim.  After  the  property  had  been  improved  the  great  fire  came,  and 
there  was  another  struggle.  Only  first-class  business  capacity  could  have  saved 
the  real  estate,  though  it  had  constantly  increased  in  value,  but  it  was  done. 

Before  he  had  succeeded  in  straightening  up  his  affairs  Gen,  Buckner  en- 
gaged in  journalism.  For  a  year  or  so  he  edited  one  of  the  New  Orleans  news- 
papers and  then  came  to  Louisville  and  occupied  the  same  post  on  the 
*' Courier."  When  that  was  united  with  the  "Journal"  he  engaged  in  busi- 
ness in  Louisville  and  in  Chicago,  It  was  to  him  the  State  is  indebted  for  the 
excellent  Insurance  Law  framed  about  that  time. 

Since  1870,  the  General  has  spent  nearly  all  his  time  upon  his  farm  in  Hart 
County.  He  took  great  delight  in  improving  it  with  new  roads,  and  gave  his 
neighbors  and  the  whole  country  the  benefit  of  his  engineering  skill.  The 
house  he  occupies  is  a  roomy  log-structure,  and,  though  he  has  made  many 
additions  to  it,  he  has  never  had  the  heart  to  pull  it  down  and  build  anew. 

In  1883,  about  a  month  or  six  weeks  before  the  State  Convention  was  held, 
Gen.  Buckner' s  friends  and  neighbors  held  a  meeting  at  Munfordville  and 
asked  him  to  make  the  race  for  Governor.  He  complied  and  made  a  brief 
bat  satisfactory  canvass.  He  carried  every  county  that  he  visited,  and  ranked 
a  close  third  in  the  number  of  instructed  votes  he  had  received.  The  Hon. 
Proctor  Knott  got  the  nomination,  but  four  years  later  it  went  to  Gen.  Buckner 
almost  without  a  contest.  He  was  elected  over  Col.  W.  O,  Bradley  by  a  plural- 
ity of  17,000  votes,  and  after  a  canvass  that  was  as  hot  as  Col.  Bradley  could 
make  it. 

As  Governor,  Gen,  Buckner  demonstrated  that  a  new  career  lay  before  him. 
His  knowledge  and  grasp  of  public  business  were  remarkable,  and  what  was 
even  more  surprising  than  his  executive  ability  was  the  profound  knowledge 
o£  constitutional  law  that  he  displayed.    He  used  the  veto  power  rather  freely, 

16 


THE    CANDIDATES. 


but  though  this  often  provoked  bitter  hostility,  he  was  almost  invariably  sus- 
tained. His  veto  of  the  bill  reducing  the  tax  levy  was  one  of  the  exceptions, 
and  because  his  act  was  disapproved  the  State  has  ever  since  been  seriously 
cramped  and  has  now  for  over  a  year  been  compelled  to  dishonor  its  bills. 
It  was  in  accordance  with  his  recommendation  for  an  investigation  that 
Treasurer  Tate's  defalcation  was  discovered.  During  his  term  at  one  time 
there  was  required  a  large  amount  of  money  to  answer  pressing  needs,  and 
he  advanced  $50,000  out  of  his  own  pocket  to  the  Commonwealth  without 
a  cent  of  charge  for  interest.  In  many  ways  he  improved  the  public  service, 
and  when  he  retired  from  oflBce  it  was  in  the  midst  of  universal  approba- 
tion. 

While  he  was  Governor,  at  the  request  of  his  neighbors  Gen.  Buckner  made 
the  race  for  delegate  to  the  Constitutional  Convention.  He  was  elected  and 
took  an  important  part  in  framing  that  instrument. 

Gen.  Buckner  has  been  twice  married.  His  first  wife  was  a  Miss  Kings- 
bury, of  Old  Lyme,  Conn.  She  died  when  young.  A  daughter,  who  became 
Mrs.  Morris  Belknap,  of  Louisville,  and  who  was  her  father's  confidant  and  idol, 
died  a  few  years  ago.  Gov.  Buckner's  second  wife  was  Miss  Delia  Claiborne, 
a  Richmond  (Va.)  belle.  Mrs.  Buckner  is  a  relative  of  Washington,  and  has 
made  the  Executive  Mansion  at  Frankfort  and  Glen  Lily,  their  home,  famous 
for  hospitality. 

The  Governor's  popularity  does  not  stop  with  the  confines  of  Kentucky  or 
the  South.  His  friendship  with  Gen.  Grant,  and  the  fact  that  he  was  one  of 
that  great  soldier's  pall-bearers,  have  made  him  widely  known  all  over  the  North 
jind  East  wherever  there  is  a  comrade  of  the  Grand  Army,  When  the  encamp- 
ment was  held  here  last  year  he  took  a  conspicuous  part  in  the  welcoming,  and 
was  one  of  the  most  sought  after  veterans  that  gathered  here.  He  has  been 
a  frequent  and  welcome  guest  at  military  reunions  both  North  and  South. 


17 


SPEECHES    OF    ACCEPTANCE. 

Gen.  Palmer's  Speech. 

You  give  me  oflBcial  information  that  delegates  representing  the  National 
Democracy  of  forty-one  States  lately  assembled  in  convention  in  the  City  of 
Indianapolis  honored  me  by  designating  me  the  National  Democratic  candidate 
for  the  Presidency,  and  that  the  convention  associated  with  me  in  the  formal 
temporary  leadership  of  that  great  historic  party  of  the  United  States,  an 
eminent  citizen  of  Kentucky — a  citizen  distinguished  in  arms  and  as  a  patriotic 
Chief  Magistrate  of  his  and  my  own  native  (commonwealth. 

Mr.  Chairman  and  Gentlemen — Gen,  Bucl^ner  and  I  were  once,  in  a 
modest  sense,  representatives  of  opposing  opinions  upon  fundamental  questions 
relating  to  the  powers  of  the  United  States  and  of  the  respective  States  under 
the  Constitution.  We  met  on  the  battlefield,  where  great  public  controversies 
that  admit  of  no  other  method  of  solution  are  determined.  I  know  he  did  his 
duty,  and  I  trust  the  country  believes  that  I  did  mine. 

A  REUNITED  PEOPLE. 

The  nominations  made  by  the  National  Democratic  Convention  at  Indian- 
apolis prove  more  conclusively  than  anything  which  has  occurred  within  the 
last  thirty  years  that  the  American  people  are  agaiii  united;  that  our  hopes, 
our  rights,  our  duties,  and  our  interests  are  the  same  ;  that  the  lofty  and 
patriotic  mission  of  the  National  Democracy  is  to  maintain  peace  and  order, 
defend  Constitutional  liberty,  regulated  by  just  and  eqnal  laws,  and  if  possible 
avert  from  the  country  repudiation,  bankruptcy,  and  National  dishonor. 

I  accept  the  unsought  honor  and  responsibilities  imposed  upon  me  by  the 
National  Democratic  Convention.  I  accept  them  as  proof  that  my  Democratic 
fellow-citizens  confide  in  my  devotion  to  Democratic  principles  so  clearly  and 
accurately  defined  in  the  proceedings  of  the  convention.  It  was  known  to  the 
delegates  to  the  convention  before  this  honor  was  conferred  upon  me,  and  is 
well  understood  by  the  country,  that  my  public  services  commenced  more  than 
fifty  years  ago,  and  that  since  that  time  I  have  taken  an  active,  earnest  part  in 
the  discussion  and  settlement  of  every  public  question  which  had  at  the  time 
sufiicient  importance  to  attract  popular  attention. 

THE  EXPERIENCES    OP  FIFTY  YEARS. 

My  opinions  and  my  public  acts  have  been  an  open  book,  to  be  read  by 
my  contemporaries.  I  have  been  at  all  times  controlled  by  my  own  convictions 
of  duty,  aad   I  have  now  no   one  whom   I   can   properly  invite   to  share   my 

18 


SPEECHES   OP  ACCEPTANCE. 


responsibilities.  Taught  by  Jefferson,  I  opposed  slavery  when  it  existed .  In- 
spired by  Jackson,  I  defended  the  Union  of  the  States  to  the  extent  of  my 
ability,  and,  influenced  by  his  example,  when  my  conduct  as  a  military  officer 
was  challenged  as  violative  of  law,  I  voluntarily  submitted  myself  to  the 
jurisdiction  of  the  civil  courts. 

When  Governor  of  my  adopted  State,  while  I  opposed  and  by  peaceful 
means  successfully  resisted  the  interference  of  the  United  States  by  its  military 
forces  in  the  purely  local  concerns  of  the  State,  I  distinctly  conceded  the  right 
and  asserted  the  duty  of  that  Government  to  enforce  within  the  States  or  else- 
where its  own  laws  by  its  own  agencies. 

Mr.  Chairman  and  gentlemen,  the  matters  to  which  I  have  adverted  are 
but  reminiscences — they  relate  and  belong  to  the  past.  Our  duties  as  lovers  of 
our  country  are  present  and  we  must  meet  and  deal  with  existing  conditions, 
and  to  these  the  late  National  Democratic  Convention  addressed  itself. 

'     TRUTHFUL   AND  DEMOCRATIC. 

Its  platform  asserts  truths  which  can  be  demonstrated,  and  it  correctly 
defines  Democratic  principles.  It  asserts  '  that  the  Democratic  party  is  pledged 
to  equal  and  exact  justice  to  all  men  of  every  creed  and  condition ;  to  the  larg- 
est freedom  of  the  individual  consistent  with  good  government  ;  to  the  preser- 
vation of  the  Federal  Government  in  its  constitutional  vigor,  and  to  the  sup- 
port of  the  States  in  all  their  just  rights  ;  to  economy  in  the  public  expendi- 
tures; to  the  maintenance  of  the  public  faith  and  sound  money,  and  it  is  up- 
posed  to  paternalism  and  all  class  legislation.' 

It  also  asserts  that  'the  declarations  of  the  Chicago  Convention  attack 
individual  freedom,  the  right  of  private  contract,  the  independence  of  the 
judiciary,  and  the  authority  of  the  President  to  enforce  Federal  laws.  They 
advocate  a  reckless  attempt  to  increase  the  price  of  silver  by  legislation  to  the 
debasement  of  our  monetary  standard,  and  threaten  unlimited  issues  of  paper 
money  by  the  Government.  They  abandon  for  Republican  allies  the  Democratic 
cause  of  tariff  reform  to  court  the  favor  of  pi;otectionists  to  their  fiscal  heresy.' 

It  then  asserts,  with  earnestness  and  in  terms  which  will  not  satisfy  those 
who  assert  it  to  be  '  the  duty  of  a  Democrat  to  first  vote  the  ticket  and  then 
read  the  platform,'  that,  in  view  of  these  and  other  grave  departures  from 
Democratic  principles,  'we  cannot  support  the  candidates  of  that  convention 
nor  be  bound  by  its  acts.' 

The  convention  held  in  Indianapolis  then  declares,  with  force  and  exact- 
ness, the  Democratic  doctrines  with  respect  to  taxation,  whether  by  tariffs, 
excises  or  by  direct  imposition,  and  asserts  that  none  of  these  can  be  rightfully 
imposed  except  for  public  purposes,  and  not  for  private  gain,  and  reaffirms  the 
historip  Democratic  doctrine  of  a  *  tariff  for  revenue  only.' 

19 


SPEECHES    OP    ACCEPTANCE. 


GOLD  MUST   BE   THE   STANDAIID, 

It  is  then  asserted  by  the  convention  in  its  declaration  of  principles  that 
'  the  experience  of  mankind  has  shown  that,  by  reason  of  their  natural  qualities, 
gold  is  the  necessary  money  of  the  large  affairs  in  commerce  and  business, 
while  silver  is  conveniently  adapted  to  minor  transactions,  and  the  most  bene- 
ficial use  of  both  together  can  be  insured  only  by  the  adoption  of  the  former  as 
a  standard  of  monetary  measure,  and  the  maintenance  of  silver  at  a  parity  with 
gold  by  its  limited  coinage  under  suitable  safeguards  of  law.  Thus  the  largest 
possible  enjoyment  of  both  metals  is  gained  with  a  value  universally  accepted 
throughout  the  world,  which  constitutes  the  only  jDractical  bimetallic  currency, 
assuring  the  most  stable  standard,  and  especially  the  best  and  safest  money  for 
all  who  earn  their  livelihood  by  labor  or  the  produce  of  husbandry.  They  can- 
not suffer  when  paid  in  the  best  money  known  to  man,  but  are  the  peculiar  and 
most  defenseless  victims  of  a  debased  and  fluctuating  currency  which  offer  con- 
tinual profits  to  the  money  changer  at  their  cost. 

,  *  Realizing  these  truths,  demonstrated  by  long  public  inconvenience  and 
lops,  the  Democratic  party,  in  the  interests  of  the  masses  and  of  equal  justice 
to  all,  practically  established  by  the  legislation  of  1834  and  1853  the  gold 
standard  of  monetary  measurement  and  likewise  entirely  divorced  the  Govern- 
ment from  banking  and  currency  issues.  To  this  long-established  Democratic 
policy  we  adhere,  and  insist  upon  the  maintenance  of  the  gold  standard  and  of 
the  parity  therewith  of  every  dollar  issued  by  the  Government,  and  are  firmly 
opposed  to  the  free  and  unlimited  coinage  of  silver  and  to  the  compulsory  pur- 
chase of  silver  bullion.' 

THE   SAME  DEMAND  IN   1892. 

This  language  is  but  a  reiteration  of  the  terse  demand  of  the  Democratic 
platform  of  1892,  that  '  every  dollar  coined  or  issued  by  the  Government  shall 
have  equal  power  in  the  market  and  in  the  payments  of  debts. ' 

The  convention  which  assembled  in  Chicago  in  July  of  the  present  year, 
in  demanding  the  unlimited  coinage  of  silver  dollars  on  the  ratio  of  412^  grains 
of  standard  silver  to  25.8  grains  of  standard  gold,  with  full  legal-tender  quality 
for  all  debts  and  dues,  public  and  private  offers  to  the  country  a  scheme  from 
which  every  voter  may  expect  whatever  advantage  to  the  country  or  himself 
his  reason  or  even  his  imagination  can  suggest. 

The  advocates  of  the  unlimited  coinage  of  full  legal-tender  silver  do  not 
agree  as  to  what  will  be  the  consequence  of  the  adoption  by  the  United  States 
of  their  favorite  measure.  The  more  intelligent  know  that  it  is  impossible  by 
law  to  give  to  silver  bullion  or  silver  coin  a  local  value  in  the  United  States ; 
and,  therefore,  Mr.  Bryan  who  must  be  regarded  as  the  official  interpreter  of 
the  free  silver  dogma,  asserts  his  belief  that  the  unlimited  coinage  of  legal-ten- 

20 


SPEECHES    OF   ACCEPTANCE. 


der  silver  by  the  Uuited  States  alone  would  increase  the  value  of  silver  bullion, 
which  is  to-day  67  cents  per  ounce,  to  $1.29,  and  he  asserts  his  belief  that 
under  unlimited  coinage  the  silver  dollar,  containing  412^  grains  of  standard 
silver,  coined  by  the  authority  of  the  United  States,  would  be  of  equal  accept- 
ability and  value  with  the  dollar  containing  25. 8  grains  of  standard  gold  in  all 
the  markets  of  the  world. 

AGAINST  THE  EXPERIENCE  OP  MANKIND. 

It  is  something  that  this  opinion  has  no  support  in  the  experience  of  man- 
kind. It  is  enough  for  present  purposes  to  say  it  has  no  foundation  other  than 
the  confident  assertions  of  those  who  share  in  that  belief.  No  party  in  the 
country  ever  undertook  so  much  as  do  the  advocates  of  the  unlimited  coinage  of 
silver.  They  not  only  undertake  to  maintain  commercial  parity  in  value  of 
about  434,502,041  silver  dollars  already  coined  by  the  United  States  under  the 
authority  of  the  acts  of  the  28th  of  February,  1878,  and  of  July  14,  1890,  and 
of  all  the  silver  dollars  that  hereafter  may  be  coined,  but  they  assume  the  task 
of  advancing  the  value  of  silver  coinage  of  all  the  nations  of  the  world  to  an 
equal  acceptability  and  value  with  coins  of  gold. 

If  the  expectations  of  such  of  the  advocates  of  free  coinage  of  silver  are 
realized  it  would  be  difficult  upon  their  own  promises  to  perceive  what  could  be 
gained  by  those  who  expect  cheap  money. 

Accepting  their  claim  that  under  free  coinage  the  dollar  of  silver  would 
become  of  equal  power  in  the  markets  and  in  the  payment  of  debts  throughout 
the  civilized  world,  the  silver  dollar  would  then  be  as  difficult  to  procure  as  the 
dollar  of  gold  is  now.  They  complain  now  that  the  dollar  of  gold  has  too 
much  purchasing  power  and  is  too  difficult  to  obtain. 

A   CHEAP  DOLLAR   MOVEMENT. 

But  the  real  expectation  of  the  great  body  of  supporters  of  the  free  coin- 
age of  silver,  and  one  much  more  in  harmony  with  the  experience  of  mankind, 
is  that  the  unlimited  coinage  of  silver  would  give  to  the  country  a  depreciated 
and  cheaper  dollar,  which  would  enhance  nominal  values  and  be  used  in  the 
payment  of  debts,  but  would  be  attended  and  followed  by  the  ruin  of  all  indus- 
tries, the  destruction  of  public  and  private  credit,  and  irreparable  mischief. 

Mr,  Chairman  and  Gentlemen  :  Our  platform  commits  ua  to  the  maiute- 
nance  of  the  Democratic  faith.  Many  of  our  associates,  deluded  by  deceptive 
sophistries,  are  supporting  a  coalition  which  disavows  the  traditional  faith  of 
the  Democratic  party.  The  best  we  can  hope  for  them  is  that  they  may  be 
defeated,  and  when  defeated,  they  may  return  to  the  safe  paths  that  they  have 
heretofore  trodden. 

21 


SPEECHES   OP   ACCEPTANCE. 


Gen.  Buckner's  Speech. 

I  cannot  fittingly  express  my  aoknowledgraent  for  the  very  graceful  and 
eloquent  terms  in  which  you  have  announced  to  me  the  action  of  the  National 
Democracy.  I  know,  sir,  that  a  spirit  actuated  that  convention  at  Indian- 
apolis which  looked  more  to  that  general  principle  of  Democracy,  that  spirit  of 
nationalism,  than  to  any  merit  in  me  in  selecting  its  candidates.  It  was  known 
that  I  had  been  prominent  on  the  border  in  advocating  the  true  principles  of 
Democracy,  but  not,  Mr.  Chairman,  for  any  merit  in  me^  but  because  of  that 
spirit. of  nationalism  which  always  pervaded  the  Democratic  party,  that  feel- 
ing crystalized  around  me  as  an  object  to  be  associated  v/ith  this  gallant 
chieftain  in  blotting  out  all  past  differences  and  sectionalism.  I  accept  that 
position,  Mr.  Chairman,  and  discharge  that  duty  with  as  much  willingness  as 
I  ever  discharged  any  on  earth  (applause) ;  to  be  associated  with  the  move- 
ment which  blots  out  all  sectional  lines  forever  and  makes  us  one  people 
and  one  nationality. 

THE  ANCIENT  SPIRIT. 
It  is  time  that  this  ancient  spirit  of  Democracy  should  be  revived.  We 
have  had  amongst  us  parties  builded  up  heretofore  upon  sectional  hate  ; 
parties  which  had  advocated  special  interests  at  the  expense  of  all  other 
interests.  We  have  had  the  great  Republican  party,  ruling  and  controlling 
the  destinies  of  this  country,  built  upon  hate  and  antagonism  to  one  half  of 
the  country.  But  now,  at  the  very  moment  that  that  party  has  announced 
that  it  will  cease  the  contention  of  one  section  against  another,  that  here- 
after it  will  be  a  national  party,  there  springs  up  again  among  us  another 
party,  professedly  built  upon  sectionalism,  urgently  insisting  that  one  special 
interest  in  this  country,  that  of  the  greedy  silver  miner,  shall  be  built  up  at 
the  expense  of  every  other  citizen  in  the  land.     And  what  is  that  party  ? 

THE   SILVER  MINERS'  PARTY. 

It  is  not  proper  that  I  should  discuss  the  particular  platforms  of  the  different 
parties  here,  but  it  is  well  for  us  as  patriots  to  ask  the  origin  of  this  party,  call- 
mg  itself  falsely  the  Democratic  party,  how  it  was  constituted  and  what  are 
the  principles  that  it  annunciates.  They  claim  that  they  were  regular.  The 
delegates  to  that  convention  were  appointed,  it  is  true,  under  the  regular 
authority  of  Democratic  organization,  but  when  the  primary  conventions  met 
to  choose  delegates  to  the  State  conventions  nearly  every  primaiy  meeting 
began  their  proceeding  by  reaffirming  the  uniform  principles  of  the  Democratic 
party.  The  delegates  sent  to  their  State  convention  were  therefore  bound  by 
the  instructions  they  received  to  adherence  to  the  principles  of  Democracy. 
When  the  State  conventions  themselves  met,  almost  without  exception,  they, 
too,  reaffirmed  the  fundamental  principles  of  the  Democratic  party  and  sent 
their  delegates  to  Chicago,  bound  in  honor  and  by  every  political  duty,  to 
adhere  to  the  principles  of  the  Democratic  party. 

22 


SPEECHES    OF   ACCEPTANCE. 


THE   ABANDONMENT   OP   DEMOCRACY'S  PRINCIPLES. 

Did  they  do  it  ?  You  have  been  told  by  the  gentlemen  who  have  preceded 
me  how  they  violated  their  instructions ;  how  they  abandoned  the  principles 
of  Democracy;  how  they  betrayed  their  own  party  to  the  enemy  and  went 
over  to  false  doctrines.  But  they  said  that  that  waa  regnlar  ;  and, 
therefore,  that  we,  and  every  one  who  has  been  associated  with  the  Demo- 
cratic party  are  bound  to  follow  their  lead,  because  they  regularly  proclaimed 
that  the  principles  of  Democracy  were  dead  and  those  of  Populism  should  be 
hereafter  those  of  Democracy.  You,  sir,  I  heard  a  few  days  ago,  make 
an  admirable  illustration  of  this  on  another  point.  These  gentlemen  at 
Chicago  claim  that  they  were  regular.  Benedict  Arnold  was  regular  in  his 
proceeding.  He  was  regularly  commissioned  by  his  government;  he  wore 
its  uniform;  he  was  regularly  assigned  by  WasJiington  to  the  command 
at  West  Point  and  the  island ;  he  issued  regularly  his  orders  through  the 
chosen  staff  officers  to  his  troops,  disbursing  them  broadcast,  in  order  that  the 
enemy  might  come  in  and  massacre  all  of  them.  All  that  proceeding  was 
regular,  but  when  he  was  detected,  when  his  rank  treason  was  discovered, 
Washington  and  his  associates  refused  to  follow  such  regular  proceedings. 
And  yet,  according  to  the  theory  of  our  friends  at  Chicago,  Washington  and 
the  patriots  of  the  Revolution  were  bolters  of  the  regular  proceedings  ;  and  in 
the  same  sense  are  we  bolters,  refusing  to  follow  the  leaders  of  this  treachery, 
adhering  as  of  old  to  the  true  principles  and  standard  of  Democracy 
The  convention  which  met  at  Chicago  was  not  Democrs.tic.  When  they  aban- 
doned Democratic  principles,  it  ceased  to  be  a  Democratic  convention,  and 
became  that  of  the  principles  which  it  adopted. 

The  Democratic  faith  has  always  claimed  that  the  United  States  Government 
is  supreme  within  the  limits  of  the  authority  they  have  received  from  the  States 
and  from  the  people  ;  that  it  has  a  right  to  go  wherever  that  flag  goes  and  it  is 
its  duty  to  enforce  the  laws  of  the  land  in  accordance  with  the  powers  conferred 
on  it ;  yet  the  Chicago  convention  would  wipe  vi:  tually  out  of  existence  that 
Supreme  Court  which  interprets  the  law,  forgetting  that  our  ancestors  in 
England  fought  for  hiindreds  of  years  to  obtain  a  tribunal  of  justice  which  was 
free  from  executive  control.  They  would  wipe  that  out  of  existence  and  sub- 
ject it  to  the  control  of  party  leaders  to  carry  out  the  dictates  of  the  party — 
they  would  paralyze  the  arm  of  the  General  Government  and  forbid  the  powers 
to  protect  the  lives  and  property  of  its  citizens.  That  convention  in  terms 
almost  placed  a  lighted  torch  in  the  hands  of  the  incendiary  and  urged  the  mob 
to  proceed  without  restraint  to  pillage  and  murder  at  their  discretion. 

Mr.  Chairman,  the  Democratic  party  can  never  endorse  such  heresy.  We 
proclaim  now  as  we  proclaimed  at  Indianapolis  the  ancient  principles  of  Democ- 
racy, obedience  to  law,  a  court  untrammeled  either  by  legislative  or  by  execu- 

23 


SPEECHES   OP   ACCEPTANCE. 


tive  control,  a  tribunal  which  is  the  last  resort  of  the  weak  against  the  powerful. 
Though  our  friends  at  Chicago  would  destroy,  we  insist  on  upholding  and 
supporting  its  decrees  by  the  whole  power  of  the  State  and  national  authority. 

THE   THREE   PLATFORMS. 

We  have  before  us  three  platfornip,  representing  three  parties  in  this  coun- 
try, and  it  is  for  you,  fellow-citizens,  to  choose  which  you  will  sustain.  The 
Republican  party,  still  adhering  to  its  principles  of  protection,  where  all  classes 
are  taxed  for  the  benefit  of  one,  and  not  regarding  its  fiatisni,  which  two  things 
together  have  brought  all  the  commercial  disasters  on  the  country  at  this  stage. 
It  adheres  to  those  doctrines.  Then  you  have  the  true  Democratic  platform, 
which  announces  still  the  old  Democratic  doctrine  which  may  be  summarized 
in  a  single  sentence,  the  Jeffersonion  doctrine  of  equal  and  exact  justice  to  all 
and  exclusive  privileges  to  none. 

We  insist  that  for  every  one  hundred  cents'  worth  oE  work  done  by  the 
laborer  he  shall  receive  one  hundred  cents.  We  advocate  the  freest  possible 
trade  and  we  insist  that  the  commerce  of  the  world  shall  be  brought  to  our 
ports  in  free  ships,  untaxed  for  the  benefit  of  any  special  interest  in  this  coun- 
try. These  were  the  fundamental  doctrines  of  Democracy  we  proclaimed  and 
over  that  the  flag  of  Democracy  waves  as  proudly  as  ever  in  the  hour  of  victory. 

But  there  is  another  party,  that  represented  by  the  conclave  at  Chicago,  and 
what  flag  is  over  it  ?  Not  the  flag  representing  their  principles,  but  like  some 
pirate  on  the  ocean,  they  hoist  false  colors,  in  order  to  allure  the  unsuspecting 
within  their  reach,  and  over  that  deck,  which  is  a  platform  in  reality,  the  ille- 
gitimate offspring  of  Republican  protection  and  fiatism  and  Populistic  com- 
munism, repudiation  and  anarchism,  that  true  flag  does  not  reveal  the  death's- 
head  of  the  pirate  until  you  are  lured  within  their  reach,  and  then,  for  the  first 
time,  you  find  yourself  engulfed  in  the  chasm  which  they  dig  for  the  pros- 
perity of  the  country. 

I  accept  the  task  imposed  upon  me  by  the  National  Democracy.  It  was 
unsought  and  undesired  further  than  as  one  who  believes  he  is  a  patriot  is 
willing  to  devote  the  few  remaining  years  of  his  life  to  the  interests  of  his 
country.  Not  only  do  I  accept  the  charge  imposed  upon  me,  but  acknowledg- 
ing the  authority. of  that  great  Democracy  to  place  its  members  wherever  it 
chooses,  I  obey  their  man'^ate  and  bear  the  flag,  which,  through  you,  they  have 
placed  in  my  hands,  under  our  distinguished  leader  in  that  vast  concourse  of 
true  Democrats  who  follow  his  steps,  knowing  that  in  the  f  ature,  as  in  the 
past,  they  lead  only  ia  the  pathway  of  duty,  of  honor,  of  principle  and  of 
patriotism. 


24 


THE  TRUE  DEMOCRATIC   PARTY— THE  WITNESS   OF 
TRUE  DEMOCRATS. 

President  Cleveland. 

Buzzard's  Bay,  Mass.,  September  10,  1896. 
Hon.  W.  D.  Bynum,  Indianapolis,  Ind.  : 

I  regret  that  I  cannot  accept  your  invitation  to  attend  the  notification  meet- 
ing at  Louisville  Saturday  evening. 

As  a  Democrat  devoted  to  the  principles  and  integrity  of  my  party,  I  should 
be  delighted  to  be  present  on  an  occasion  so  significant,  and  to  mingle  with 
those  who  are  determined  that  the  voice  of  true  Democracy  shall  not  be  smoth- 
ered, and  who  insist  that  the  glorious  standard  shall  be  borne  aloft  as  of  old  in 

faithful  hands. 

Q  ROVER  Cleveland. 

Secretary  Carlisle. 

Bar  Harbor,  Me.,  September  12,  1896. 
Hon.  W.  D,  Bynum,  Louisville,  Ky.  : 

Your  telegram  inviting  me  to  attend  the  meeting  at  Louisville  to-day  has 
been  forwarded  to  me  at  this  place,  and  I  greatly  regret  my  inability  to  accept. 

The  conservative  and  patriotic  declaration  of  the  Indianapolis  Convention 
on  the  public  questions  involved  in  the  pending  contest,  and  the  high  character 
of  its  nominees,  cannot  fail  to  arouse  the  real  Democratic  sentiment  of  the 
country  and  command  the  hearty  support  of  all  who  sincerely  believe  in  the 
preservation  of  the  public  honor,  the  public  peace,  and  the  stability  and  value 
of  the  currency  used  by  our  people. 

I  am  proud  to  take  my  stand  with  the  old-fashioned  Democrats  who  have 
refused  to  abandon  their  honest  convictions  in  order  to  form  unnatural  alliances 
with  political  and  social  organizations,  whose  purposes  are  dangerous  to  the 
country  and  wholly  inconsistent  with  the  fundamental  principles  of  our  party, 
and  I  pledge  to  you  and  your  associates  such  support  and  assistance  as  I  can 
properly  give  during  the  campaign. 

J.  G.  Carlisle. 

Secretary    Lamont. 

Washington,  D.  C,  Sept.  9,  1896. 
Hon.  William  D.  Bynum,  Chairman,  etc.  : 

I  regret  that  I  am  unable  to  accept  the  invitatioK!  of  your  committee  to 
be  present  at    the    notification    to    Senator    John    M.   Palmer    and   ex- Gov. 

25 


THE   TRUE   DEMOCRATIC   PARTY. 


Simon  B.  Buckner  of  their  nomination  by  the  National  Democratic  party  for 
President  and  Vice-President  of  the  United  States.  The  outcome  of  the 
Indianapolis  convention  in  candidates  and  platform  is  inspiring  to  every 
Democrat  vrho  refuses  to  abandon  the  principles  established  by  the  fathers 
and  steadfastly  maintained  with  pride  and  honor,  and  who  declines  to  adopt 
the  new  and  strange  creed  proclaimed  in  a  moment  of  delirium  at  Chicago 
and  promptly  recognized  and  ratified  as  its  own  by  the  Populist  party  at 
St.  Louis.  I  prefer  to  keep  the  old  faith  and  remain  a  Democrat,  and  shall 
accordingly  cast  my  vote  for  Palmer  and  Buckner. 

Daniel  S.  Lamont. 

Secretary  Francis. 

Washington,  D.  C,  Sept.  10,  1896. 
Hon.  W.  D.  Byntjm,  Chaiiman,  Indianapolis,  Ind.  : 

I  regret  can  not  accept  your  invitation  to  attend  the  notification  of  Gens. 
Palmer  and  Buckner  at  Louisville,  Saturday  evening.  Those  old  heroes  have 
fought  valiantly  for  their  convictions  on  many  battle  fields,  but  no  patriot 
ever  enlisted  in  a  nobler  cause  than  that  which  they  have  consented  to 
lead.  It  is  the  maintenance  of  the  country's  honor  and  the  preservation  of 
the  integrity  of  Democratic  principles,  on  whose  perpetuity  depends  the  survival 
of  our  institutions.  May  the  nominees  receive  that  earnest  and  zealous  sup- 
port which  their  high  character  and   the   National   Democratic   party's  pure 

aims  so  richly  merit. 

David  R.  Francis. 


THE  "  FREE  SILVER  "  PLUNGE  A  NEW  EXPERIMENT. 

The  proposal  of  the  Free  Silver  party  differs  absolutely  from  anything  yet  attempted  in  the 
history  of  the  country.  It  is  made  in  disregard  of  all  experience  and  common  sense  and  could 
have  but  one  result— to  land  every  interest  in  the  country  in  a  common  abyss  of  ruin. 

The  demands  of  both  wings  of  the  Free  Silver  party  in  regard  to  the  coinage 
of  silver  are  substantially  identical. 

The  Chicago  platform  says:  "  We  demand  the  free  and  unlimited  coinage 
of  both  gold  and  silver  at  the  present  legal  ratio  of  16  to  1  without  waiting  for 
the  aid  or  consent  of  any  other  nation.  We  demand  that  the  standard  silver 
dollar  shall  be  a  full  legal  tender  equally  with  gold,  for  all  debts,  public  and 
private." 

The  St.  Louis  platform  says  :  "  We  demand  the  free  and  unrestricted  coinage 
of  silver  and  gold  at  the  present  legal  ratio  of  16  to  1,  without  waiting  for  the 
consent  of  foreign  nations," 

The  candidate  of  both  conventions  has  declared  in  his  speech  accepting  the 
nomination  of  the  Chicago  Convention  :  "As  against  the  maintenance  of  a 
gold  standard,  either  permanently  or  until  other  nations  can  be  united  for  its 
overthrow,  the  Chicago  platform  presents  a  clear  and  emphatic  demand  for  the 
immediate  restoration  of  the  free  and  unlimited  coinage  of  silver  and  gold  at 
the  present  legal  ratio  of  16  to  1,  without  waiting  for  the  aid  or  consent  of  any- 
other  nation.  We  are  not  asking  that  a  new  experiment  be  tried ;  we  are  in- 
sisting upon  a  return  to  a  financial  policy  approved  by  the  experience  of  history 
and  supported  by  all  the  prominent  statesmen  of  our  nation  from  the  days  of 
the  first  President  down  to  1873." 

"  When  we  ask  that  our  mints  be  opened  to  the  free  and  unlimited  coinage 
of  silver  into  full  legal-tender  money,  we  are  simply  asking  that  the  same  mint 
privileges  be  accorded  to  silver  that  are  now  accorded  to  gold.  When  we  ask 
that  this  coinage  be  at  the  ratio  of  16  to  1,  we  si  n ply  ask  that  our  gold  coins 
and  the  standard  silver  dollar — which,  be  it  remembered,  contains  the  same 
amount  of  pure  silver  as  the  first  silver  dollar  coined  at  our  mints— retain  their 
present  weight  and  fineness." 

CIRCUMSTANCES  ALTER  CASES. 

In  stating  that  the  proposed  free  coinage  of  silver  is  not  a  new  experiment, 
Mr.  Bryan  is  manifestly  mistaken.  When  all  the  conditions  under  which  an 
experiment  is  made  have  changed,  the  experiment  itself  changes  in  character 
also.  That  the  conditions  surrounding  free  coinage  have  changed  may  be 
easily  demonstrated  by  a  reference  to  the  facts  of  history.  In  declaring  that 
no  Slate  shall  make  anything  but  gold  and  silver  a  legal  tender  in  payment  of 

1.01  . 


OF  X2:s 

71ESITT1 


THE   "FREE   SILVER"   PLUNGE 


debts,  the  Constitution  merely  confirms  the  power  of  the  general  government 
to  have  the  sole  regulation  of  the  coinage.  "What  the  relations  of  the  two 
metals  in  that  coinage  should  be  was  left  to  Congress  to  determine. 

The  monetary  unit  of  the  first  coinage  act,  as  of  all  subsequent  coinage 
acts,  was  the  dollar.  The  Law  of  1793  was  drafted  ia  s!rict  conformity  with 
the  recommendations  of  Alexander  Hamilton  in  his  celebrated  mint  report, 
and  what  Hamilton  aimed  at  was  a  monetary  unit  of  two  terms  between  which 
there  should  be  strict  equivalence.  The  two  terms  were  24.75  grains  of  pure 
gold  to  371  25  grains  of  pure  silver,  either,  in  coins  bearing  the  mint  stamp 
of  the  United  States  and  combined  with  a  certain  proportion  of  alloy,  being 
equivalent  to  the  value  of  one  dollar.  But  by  this  ratio  of  one  to  fifteen 
it  was  found  that  gold  was  undervalued,  an  ounce  of  gold  being  held  in 
the  other  markets  of  the  world  to  be  worth  15.5  ounces  of  silver.  The  mints 
of  France  were  open  to  its  free  coinage  at  that  ratio,  so  it  was  impossible  to 
keep  gold  in  the  country. 

Up  to  the  time  when  the  Act  of  1834  came  in  to  redress  the  lack  of  equiva- 
lence between  the  two  terms  of  the  monetary  unit,  the  most  important  element 
of  the  coinage  was  the  silver  half-dollar.  This  had  full  legal  tender  power 
and  quality,  the  grains  of  standard  silver  it  contained  being  just  half  of  the 
weight  of  the  dollar.  The  Act  of  1834  reduced  the  amount  of  pure  gold  in  the 
dollar  to  28.20  grains,  and  later  the  Act  of  1837  made  it  23.22  grains.  As  the 
amount  of  pure  silver  in  the  dollar  remained  unchanged,  its  weight  only  being 
reduced  to  412.5  grains  by  a  reduction  of  the  amount  of  copper  alloy,  the  ratio 
of  1834  was  a  fraction  more  than  16  to  1,  and  the  ratio  of  1837  a  fraction  less. 
This  ratio  was  adopted  in  opposition  to  the  advice  of  Albert  Gallatin,  who 
advised  the  fixing  of  the  intermediate  ratio  of  15.5  to  1,  which  continued  to  be 
that  of  the  nations  of  Continental  Europe.  The  ratio  of  1834-37  erred  on  the 
one  side  as  much  as  the  ratio  of  1792  had  erred  on  the  other,  and  silver  was 
driven  out  of  circulation  under  the  new  system  as  thoroughly  as  gold  had  been 
under  the  old  one. 

Down  to  1873,  when  the  place  of  the  non-existent  silver  dollar  was  taken  by 
a  trade  dollar  designed  to  facilitate  commerce  with  the  East,  and  the  statutory 
bimetallism  which  had  become  a  dead  letter  more  than  a  generation  before, 
was  formally  abandoned,  all  the  attempts  made  to  secure  equivalence  between 
gold  and  silver  had  failed. 

GOOD-BYE   TO   COMMON  SENSE  1 

And  yet  these  experiments  had  been  made  under  conditions  much  more 
favorable  to  their  success  than  any  that  exist  now.  For  over  a  hundred  and 
fifty  years,  the  market  ratio  between  gold  and  silver  had  varied  comparatively 
little.  In  1717  it  was  15.13  to  1,  and  in  1873  it  was  15.92  to  1.  Even  during 
the  period,  1848-68,  of  thr  immense  production  of  gold,  amounting  to  $2,757,- 

1.02 


A   NEW   EXPERIMENT. 


000,000  against  only  $813,000,000  of  silver,  the  change  in  the  ratio  did  not 
exceed  1.6  per  cent.  There  was  that  much  difference  between  the  commer- 
cial ratio  of  1873  and  1874,  and  ten  times  that  difference  between  the  commer- 
cial ratio  of  1874  and  1884. 

If  the  error,  amounting  to  less  than  three  per  cent.,  in  the  ratio  of  1792,  pre- 
vented gold  from  entering  into  circulation  for  forty-five  years,  and  a  similar 
error  on  the  other  side  in  1837  brought  gold  into  circulation  but  banished 
silver,  how  much  more  certain  would  the  proposal  of  the  Silver  Party  Conven- 
tions be  to  cause  the  wholesale  exportation  of  gold  and  make  silver  the  sole 
standard  of  value  ?  If  the  experience  of  the  founders  of  the  Republic  is  to 
be  brought  into  this  controversy,  it  ought  to  be  as  a  lesson  and  a  warning. 
Now  that  one  ounce  of  gold  will  buy  over  thirty  ounces  of  silver,  the  pro- 
posed restoration  of  the  equivalence  of  the  two  elements  of  the  monetary  unit, 
on  the  theory  that  one  ounce  of  gold  will  buy  only  sixteen  ounces  of  silver,  is 
an  affront  to  ordinary  intelligence. 

The  recent  legislation  of  the  United  States,  which  was  passed  with  a  view  to 
arrest  the  fall  in  the  price  of  silver,  and  so  to  bring  the  commercial  and  legal 
ratio  into  closer  accord,  reserved  the  privilege  of  coinage  to  the  Government, 
placed  a  limit  on  its  volume,  looked  to  the  co-operation  of  foreign  nations,  and 
declared  it  to  be  the  policy  of  the  country  to  maintain  the  silver  coinage  at 
equal  and  interchangeable  value  with  gold.  The  act  of  February  28,  1878, 
declares  in  its  second  section  :  "  That  immediately  after  the  passage  of  this 
act  the  President  shall  invite  the  governments  of  the  countries  composing  (he 
Latin  Union,  so  called,  and  of  such  other  European  nations  as  he  may  deem 
advisable,  to  join  the  United  States  in  a  conference  to  adopt  a  common  ratio 
between  gold  and  silver,  for  the  purpose  of  establishing  internationally  the 
use  of  bimetallic  money  and  securing  fixity  of  relative  value  between  those 
metals." 

The  act  of  July  14,  1890,  provided :  "  That  upon  demand  of  the  holder  of 
any  of  the  Treasury  notes  herein  provided  for  the  Secretary  of  the  Treasury 
shall,  utfder  such  regulations  as  he  may  prescribe,  redeem  such  notes  in  gold 
or  silver  coin,  at  his  discretion,  it  being  the  established  policy  of  the  United 
States  to  maintain  the  two  metals  on  a  parity  with  each  other  upon  the  present 
legal  ratio,  or  such  ratio  as  may  be  provided  by  law. " 

The  act  of  November  1,  1893,  repealing  this  latter  statute,  has  for  its  con- 
cluding sentences  the  following  :  ''And  it  is  hereby  declared  to  be  the  policy 
of  the  United  States  to  continue  the  use  of  both  gold  and  silver  as  standard 
money  of  equal  intrinsic  and  exchangeable  value,  such  equality  to  be  secured 
through  international  agreement,  or  by  such  safeguards  of  legislation  as  will 
insure  the  maintenance  of  the  parity  in  value  of  the  coins  of  the  two  metals, 
and  the  equal  power  of  every  dollar  at  all  times  in  the  markets  and  in  payment 
of  debts.     And  it  is  hereby  further  declared  that  the  efforts  of  the  Government 

1.03 


THE    "FREE    SILVER"   PLUNGE 


should  be  steadily  directed  to  the  establishment  of  such  a  safe  system  of  bimet- 
allism as  will  maintain  at  all  times  the  equal  power  of  every  dollar  coined  or 
issued  by  the  United  States,  in  the  markets  and  in  the  payment  of  debts." 

The  legislation  proposed  in  the  Chicago  and  St.  Louis  platforms  proceeds 
on  a  repudiation  of  the  principles  of  all  the  legislation  that  has  preceded  it. 
The  idea  that  was  uppermost  in  the  minds  of  the  authors  of  our  earliest  coinage 
legislation,  that  the  closest  possible  correspondence  in  the  legal  and  the  commer- 
cial ratio  between  gold  and  silver  should  be  maintained,  is  thrown  to  the  winds, 
and  the  idea  of  the  later  legislation  that  a  dollar  in  any  and  every  one  of  the 
constituent  elements  of  the  currency  of  the  United  States,  gold,  silver  and 
paper,  should  be  maintained  as  of  equal  value  is  alike  discarded.  The  propo- 
sal is  that  the  monetary  unit  should  be  a  dollar  containing  3'71.25  grains  of 
pure  silver,  worth  to-day  in  the  markets  of  the  world  about  53  cents,  and  that 
this  should  be  the  measure  of  all  values  and  the  standard  for  the  payment  of 
all  debts. 

This,  obviously,  is  silver  monometallism,  pure  and  simple,  and  one  of  its 
first  effects  would  be  to  drive  all  the  gold  in  the  country  either  abroad  or  into 
hiding.  For,  manifestly,  no  possessor  of  gold  coin  or  bullion  would  exchange 
33.22  grains  of  pure  gold,  now  called  a  dollar,  for  371.25  grains  of  pure  silver, 
which  the  Government  of  the  United  States  had  stamped  as  a  dollar  and 
returned  to  its  owner,  when  he  could  buy  for  every  23.22  grains  of  his  gold 
700  grains  of  pure  silver  and  have  them  stamped  on  his  own  account.  The 
fact  that  23.22  grains  of  pure  gold  are  now  freely  exchanged  for  coins  contain- 
ing only  371.25  grains  of  pure  silver,  or  for  their  paper  equivalents,  is  simply 
due  to  the  other  fact  that  the  credit  of  the  Government  is  pledged  to  maintain 
such  silver  coins,  notes  or  certificates  as  good  as  the  gold  dollar.  No  such 
pledge  could  be  given  or  maintained  under  free  silver  coinage,  because,  among 
other  reasons,  it  would  bankrupt  any  government  that  gave  it.  The  repeal  of 
the  Bullion  Purchase  Act  of  1890  became  a  pressing  necessity  in  1893,  because 
even  tmder  its  limitations  of  coinage  and  with  the  Government  taking  all  the 
profits  of  the  transaction,  it  was  demonstrated  to  be  impo  sible  to  keep  the 
growing  volume  of  silver  and  of  paper  based  on  silver  in  the  currency  or  a 
parity  with  gold. 

AN   OBJECT   LESSON   IN   SILVER. 

The  preliminaries  of  the  crisis  which  preceded  the  repeal  of  the  law  of  1890 
(usually  known  as  the  Sherman  Act)  are  thus  outlined  by  Congressman  John 
DeWitt  Warner  : 

"  As  is  pretty  generally  agreed,  the  growing  dullness  of  business  had  left 
our  currency  superabundant  as  far  back  as  1890  ;  while  in  that  year  the  rate 
at  which  depreciated  silver  was  poured  into  it  was  increased  from  $24,000,000 
a  year  to  more  than  double  that  rate.     The  effect  was  as  though  water  were 

1.04 


A   NEW   EXPERIMENT. 


poured  into  a  measure  already  filled  with  oil.  The  Sherman  notes,  whose  cir- 
culation was  bounded  by  national  lines,  went  to  the  bottom  of  the  measure — 
that  is,  stayed  in  this  country  ;  the  gold,  free  to  move — that  is,  current  every- 
where— overflowed  to  foreign  countries. 

"  Another  effect  now  began  to  be  i)rominent.  To  a  small  extent  our  hold- 
ers of  mortgages  (which  in  this  country  are  usually  for  short  terms,  even 
though  intended  as  permanent  investments)  promptly  secured  themselves  by 
requiring  renewals  under  contracts  payable  in  gold  ;  but  many  lenders — to 
some  extent  from  individual  hesitancy  in  exacting  unusual  terms  of  borrowers, 
and  to  some  extent  from  apprehension  lest  the  legislation  threatened  in  many 
States  against  such  discrimination  might  prove  valid— refused  to  make  or 
renew  time  loans,  thus  forcing  a  stagnation  of  enterprise  in  many  direc- 
tions and  in  many  others  a  realization  of  assets  under  unfavorable  circum- 
stances. 

"  Concurrent  with  this  w^as  developed  a  disposition  to  hoard  gold  and  to 
discriminate  in  its  favor  hy  withholding  it  from  payments.  That  this  was 
markedly  true  in  1893  is  universally  understood.  It  seems  to  have  been  for- 
gotten in  many  quarters  how  much  earlier  than  that  year  this  practice  became 
general ;  though  an  inspection  of  the  treasury  accounts  shows  that  in  Septem- 
ber, 1890,  the  first  month  after  the  passage  of  the  Sherman  Act,  the  Treasury 
lost  $88,000,000  of  its  gold  reserve. 

''  June  30,  1890,  the  net  treasury  assets  were  $255,893,000,  of  which  $190,- 
232,000  was  in  gold  and  gold  bullion.  A  year  later  similar  assets  were  $176,- 
459,000,  of  which  $117,667,000  was  in  gold  and  gold  bullion— the  "  free  gold," 
that  is  the  amount  above  the  $100,000,000  reserve  for  greenback  redemption, 
having  been  reduced  during  the  year  from  $90,232,000  to  $17,667,000. 

"  Recalling  that  the  customs  receipts  are  the  principal  streams  which  feed 
the  Treasury,  we  can  investigate  one  step  further.  In  June,  1890,  above  90 
per  cent,  of  our  customs  receipts  were  in  gold.  The  proportion  of  gold  stead- 
ily declined  thereafter  until  in  June,  1891,  but  twelve  per  cent,  of  the  customs 
receipts  were  in  gold. 

"  The  circle  of  investigation  is  complete  for  the  period.  The  Treasury  was 
diluting  the  currency  by  silver  inflation  at  the  rate  of  $4,500,000  each  month  ; 
and  at  the  same  time  it  was  rapidly  losing  power  to  maintain  its  parity  in  gold ; 
while  the  selection  by  which  gold  was  retained  and  silver  used  for  payments 
to  Government  indicated  that  gold  was  being  hoarded  outside. 

"The  National  Administration,  though  doing  nothing  to  avert  the  crisis, 
was  sensible  of  its  approach.  In  the  spring  of  1891  the  Treasury,  by  refusing 
to  furnish  gold  bars,  of  which  it  had  plenty,  practically  charged  gold  exporters 
one-tenth  per  cent,  premium,  at  which  price  during  that  year  they  took  above 
$60,000,000  ;  and  during  the  summer  of  1891,  the  Government  attempted  to 
gain  gold  by  selling  legal-tender  Western  exchange  at  a  price  sixty  cents  per 

1,05 


THE    "FREE    SILVER"   PLUNGE 


$1,000  less  than  the  normal  rates,  on  condition  of  being  paid  in  gold,  some 
$12,000,000  of  which  was  promptly  thus  secured. 

"Finally,  to  accelerate  the  rate  at  which  we  were  moving  toward  disaster, 
the  joint  effect  of  the  tariff  revision  of  1890  and  the  liberal  appropriations  of 
the  Fifty -second  Congress  had  been  to  turn  the  late  annual  surplus,  averaging 
$110,000,000  per  annum  for  the  year  1888-1890,  into  a  deficit  which  for  the 
year  beginning  July  1,  1893,  amounted  to  more  than  $69,000,000 ;  so  that  a 
constantly  weaker  Treasury  faced  a  steadily  increasing  responsibility.  The 
time  thus  rapidly  approached  when  the  sole  resource  to  maintain  our  currency 
upon  a  natural  basis  would  be  the  steadily  diminishing  gold  receipts  of  the 
Treasury  ;  which,  so  far  as  concerned  customs  revenues,  had  shrunken  to  less 
than  four  per  cent,  in  September,  1892,  and  never  again  rose  above  ten  per 
cent,  until  in  the  currency  famine  of  1893,  the  hoarded  gold  coin  was  forced 
from  the  bank  vaults. 

**  Sach  was  the  course  along  which  the  Treasury  steadily  drifted  for  years, 
until  in  February,  1893,  the  outgoing  Administration,  by  private  appeal  to  its 
friends,  secured  some  $6,500,000  of  gold  from  New  York  bankers,  Justin 
time  to  enable  it,  going  out  on  the  4th  of  March,  to  escape  the  breaking  of 
the  dam  behind  which  for  years  it  had  seen  the  waters  steadily  piling. 

"As  the  Cleveland  Administration  settled  into  its  place  the  flood  was  still 
lising,  though  not  faster  than  had  been  the  case  for  months  previous. 
But  soon  the  actual  impairment  of  the  $100,000, OOD  Treasury  gold  reserve 
showed  the  water  trickling  over  the  levee,  and  on  every  side  each  weak  spot 
about  to  give  way." 

A   COMPREHENSIVE  PROPOSAL. 

Disastrous  as  were  the  results  of  the  experiments  in  "rehabilitating" 
silver  which  culminated  in  the  Sherman  Act,  the  result  of  any  such  experi- 
ment as  is  demanded  by  the  Chicago  platform  and  echoed  in  the  Populist 
platform  adopted  at  St.  Louis  must  be  more  disastrous  still.  That  experiment 
consists  of  three  main  conditions  :  (1)  that  the  coinage  of  silver — instead  of 
being  under  the  control  of  the  Government,  as  at  present,  and  therefore  re- 
stricted in  amount — shall  be  so  far  free  that  any  citizen  may,  on  demand,  have 
any  amount  of  silver  bullion  converted  into  silver  dollars  without  charge  or 
seigniorage ;  (2)  that  the  fine  silver  so  coined  shall  be  only  16  times  the  weight 
of  fine  gold  contained  in  the  gold  dollar,  though  it  would  require  over  30  times 
the  silver  to  equal  the  value  of  the  gold  ;  and  (3^  that  the  silver  dollars  so 
coined  shall  be  legal  tender  for  the  payment  of  debts,  without  limit  as  to 
amount.  It  is  not  even  proposed  to  limit  this  privilege  of  coinage  to  bullion  of 
domestic  production,  but  to  throw  open  the  mint  to  supplies  coming  from  any 
part  of  the  world. 

Though  there  is  in  every  country  in  Europe  a  party,  more  or  less  consid- 
erable in  numbers  and  ia-fluence,  that  is  in  hearty  sympathy  with  this  financial 

1.06 


A   NEW    EXPEBIMENT. 


programme,  there  is  nowhere,  outside  of  the  United  States,  a  party  that 
believes  in  the  possibihty  of  any  one  nation  being  able  to  restore  the  parity 
of  silver  with  gold.  This  profound  and  all  but  universal  European  distrust 
of  the  ability  of  this  nation  to  accomplish  alone  a  task  likely  to  prove  hard 
enough  for  a  combination  of  the  great  civilized  powers  of  the  world,  has  a 
vital  bearing  on  the  feasibility  of  the  American  silver  programme.  It  so 
happens  that  our  external  indebtedness  is  the  largest  of  any  nation  in  the 
world,  being  estimated  at  between  |1, 500, 000,000  and  $2,000,000,000.  If  our 
foreign  creditors  had  confidence  in  our  ability  to  restore  the  value  of  silver  in 
the  way  proposed  by  the  silver  industry,  they  might  be  expected  to  at  least 
assent  to  a  fair  trial  of  free  coinage  before  recalling  their  loans.  But  having 
only  one  opinion  as  to  the  certain  failure  of  such  an  experiment,  the  course 
they  would  take,  in  the  contingency  of  free  coinage  being  authorized,  admits 
of  no  doubt.  With  a  fixed  conviction  that  unlimited  coinage  would  force  us 
upon  the  silver  basis  and  precipitate  a  fall  in  the  current  value  of  the  silver 
dollar  to  the  market  value  of  silver  bullion,  they  would  immediately  proceed 
to  realize  upon  our  obligations  in  our  own  markets.  That  would  be  an  inevit- 
able result  of  investors'  prudence.  The  force  of  this  factor  would  be  felt, 
indeed,  before  the  revolution  could  be  put  in  operation  ;  and  there  can  be  no 
uncertainty  about  the  effects  which  it  would  develop. 

So  soon  as  the  prospect  of  the  enactment  of  free  coinage  became  reasonably 
sure,  the  return  of  these  foreign-held  securities  would  set  in.  The  reflux 
would  intensify  the  distrust  of  our  creditors;  and  the  remittances  of  gold 
against  their  realizations  would  compel  a  suspension  of  gold  payments  before 
the  new  law  could  be  put  in  operation.  Theie  would  follow  an  inevitable 
demoralization  and  disorganization  of  banking  and  credit  operations,  a  pros- 
tration of  all  commerce  and  a  paralysis  of  all  industry.  The  catastrophe 
would  in  magnitude  and  violence  transcend  any  in  all  our  history  ;  the  crisis 
attending  the  outbreak  of  the  Civil  War  would  be  a  small  matter  compared  with 
it.  Of  course  we  could  not  liquidate  our  whole  foreign  indebtedness,  for  we 
should  have  no  available  means  for  making  such  enourmous  settlements.  Our 
entire  stock  of  gold  would  not  suffice  to  pay  more  than  one-third  of  our  obli 
gations.  There  would  be  a  point  at  which  the  return  of  securities  must 
cease,  but  only  to  be  renewed  the  moment  there  was  any  recovery  in  our  ability 
to  pay  for  them  ;  and  those  obligations  would  interminably  press  like  a  mill 
stone  upon  our  finance  and  prevent  the  recovery  of  our  prostrated  credit. 

Concurrently  with  the  apparent  triumph  of  the  course  of  free  silver  coin- 
age would  necessarily  come  the  abandonment  of  the  efforts  of  the  Government 
to  maintain,  in  the  language  of  the  National  Democratic  platform  of  1892  and 
of  the  act  of  November  1,  1893,  ♦*  the  equal  power  of  every  dollar  at  all  times 
in  the  markets  and  in  the  payment  of  debts."  There  would  be  a  wild  rush  by 
every  one  holding  the  paper  obligations  of  the  Government  to  convert  them 


1.07 


THE   "FREE   SILVER"   PLUNGE   A   NEW   EXPERIMENT. 

into  gold  and  a  compulsory  recourse  by  the  Treasury  to  payments  in  silver. 
Gold  would  at  once  go  to  a  premium,  and  the  paper  money  in  the  pockets  of 
the  people  would  shrink  in  purchasing  power  with  each  advance  in  the  gold 
premium  that  marked  the  decline  in  value  of  the  silver  coinage  and  the  notes 
payable  in  it  to  the  market  price  of  371.25  grains  of  silver  bullion.  All  tiade 
would  be  thrown  out  of  joint,  factories  would  close  and  the  wholesale  transactions 
in  every  class  of  merchandise  would  cease,  till  the  people  had  learned  to  adapt 
themselves  to  the  new  conditions.  Recovery  would  necessarily  be  slow,  un 
less  indeqd  a  revelation  of  the  gulf  of  ruin  opened  up  before  the  country 
should  produce  a  change  in  public  sentiment  so  sudden  and  complete  as  to 
compel  a  return  to  the  safe  ground  which  had  been  so  heedlessly  abandoned. 
But  the  lesson,  even  were  it  so  quickly  perceived  and  promptly  acted  on, 
would  be  a  frightfully  costly  one,  and  would  have  to  be  paid  for  by  years  of 
patient  toil  by  the  producers  of  the  country's  wealth. 


1.08 


THE    LATIN     MONETARY    UNION    AND    THE    INTER- 
NATIONAL   CONFERENCES. 

This  union  of  the  five  nations,  France,  Belgium,  Switzerland,  Italy  and  Greece,  containing 
about  eii?lity  million  people,  is  usually  credited  with  having  demonstrated  the  success  of  a 
system  of  bimetallism.  In  point  of  fact  its  experience  below  demonstrates  the  impossibility 
of  maintaining  such  a  system  under  trifling  variations  between  the  legal  and  commercial 
ratio  of  the  two  metals,  and  its  absolute  and  costly  failure  when  these  variations  become 
large. 

In  what  goes  before,  certain  statements  have  been  made  which  may  seem 
to  require  proof.  First  among  these  is  that  in  regard  to  European  opinion  as 
to  the  possibility  of  the  United  States  restoring,  unaided,  the  parity  between 
gold  and  silver  under  a  system  of  free  coinage. 

Europe  has  seen  in  the  last  thirty  years  a  succession  of  efforts  to  work  out 
the  problem  of  keeping  gold  and  silver  circulating  side  by  side  at  a  fixed 
ratio,  and  the  conclusion  which  it  has  drawn  from  the^e  is  that  no  nation  or 
combination  of  nations  can  accomplish  this  under  a  system  of  free  and  un- 
limited coinage.  It  can  be  done  with  restricted  coinage  under  the  Government 
control,  but  not  otherwise.  That  conclusion  is  a  necessary  induction  from 
the  experience  of  the  nations  comprising  the  Latin  Monetary  Union,  whose 
history  has  been  written  by  Pierre  des  Essars,  the  Chief  of  the  Department  of 
Economics  of  the  Bank  "of  France,  as  a  chapter  in  that  monumental  work  "A 
History  of  Banking  in  All  Nations,"  published  by  the  New  York  "Journal 
of  Commerce  and  Commercial  Bulletin. "  From  this  chapter  is  extracted  the 
following  summary  of  facts : 

The  law  of  the  7th  Germinal,  Year  XI.,  which  established  the  French 
monetary  system,  provided  that  "  Five  grammes  of  silver  of  a  standard  fine- 
ness of  .9  shall  constitute  the  monetary  unit,  designated  by  the  name  franc." 
Articles  6,  7  and  8  added  :  "Gold  pieces  of  20  and  40  francs  shall  be  struck. 
Their  standard  is  fixed  at  .9  fine  and  .1  alloy.  The  pieces  of  20  francs  shall 
be  155  to  the  kilogramme,  and  those  of  40  francs  77.5  to  the  kilogramme." 
According  to  these  provisions,  gold  of  equal  weight  and  standard  is  consid- 
sidered  to  be  worth  15.5  times  as  much  as  silver.  This  was  the  ratio  fixed 
by  royal  decree  of  October  30,  1785. 

The  simplicity  and  admirable  convenience  of  the  French  monetary  system, 
with  its  great  advantage  of  a  decimal  basis,  procured  for  it  adoption  by  Belgium 
on  June  5,  1832,  Switzerland  May  7,  1850,  and  Italy  August  24,  1863.  In 
consequence  of  this  identity  of  system,  the  moneys  of  each  of  the  four  coun- 
tries circulated  freely  in  the  others,  and  thus  a  kind  of  monetary  union  was 
improvised  without  formal  understanding.  But  in  1850,  as  a  result  of  the  dis- 
covery of  gold  deposits  in  California  and  Australia,  the  monetary  circulation 

1.09 


THE   LATIN   MONETARY   UNION 


of  Europe  was  profoundly  disturbed.  Here  was  a  case,  apparently,  of  the 
depreciation  of  gold  and  a  reflection  on  the  stability  of  value  claimed  for  that 
metal.  But  it  will  be  observed  that  the  extreme  range  of  gold  fluctuation  was 
less  than  one  per  cent.,  while  the  depreciation  of  silver  has  been  over  50  per 
cent.  Whereas  gold  was  abundant  and  commonly  used  even  for  payments  of 
slight  importance,  silver,  whose  production  had  remained  stationary,  rose  in 
value.  The  ratio  between  gold  and  silver,  which,  during  the  ten  years  1841-50, 
had  averaged  1  to  15.835,  declined  in  the  fifteen  succeeding. years,  fal  ing 
below  15.5  from  1852  to  1801,  the  lowest  point,  15. '^l,  being  reached  in  1859. 
The  average  ratio  of  gold  and  silver  during  that  period  was  15.37.  The  relative 
increase  in  the  value  of  silver,  amounting  to  0.846  or  less  than  ^  of  one 
per  cent,  was  sufficient  to  attract  speculators,  who,  by  continuous  man- 
ipulations with  large  quantities  of  metal,  gained  templing  profits.  At  the 
very  start  the  money-changers  drained  the  market  of  five-franc  pieces,  which 
disappeared  from  circulation.  The  fractional  coins  were  melted,  and  France 
suffered  from  a  genuine  silver  money  famine,  affecting  the  supply  both  of 
five-franc  pieces  and  subsidiary  coins.  Among  the  varied  devices  suggested 
for  putting  an  end  to  the  dearth  of  fractional  money,  one  was  seized  upon 
that  had  eminently  the  characteristics  of  an  expedient.  The  intrinsic  value 
was  reduced  to  do  away  with  the  profits  obtained  from  melting.  Switzer- 
land, by  a  Federal  Act  of  1860,  lowered  the  standard  of  the  silver  franc 
and  its  multiples  up  to  five  francs,  and  of  its  fractions,  to  .8  fine,  so  that 
the  franc  coin  was  worth  only  0.889  franc.  Italy,  adopting  the  French  system 
in  1863,  struck  coins  in  denominations  below  five  francs  at  a  standard  of  0.835, 
which  gave  the  franc  an  intrinsic  worth  of  0  928  franc.  In  France  a  law  was 
enacted  May  24,  1864,  on  the  model  of  the  Italian  measure,  adopting  the 
standard  of  0.835  for  the  twenty  and  fifty  centime  pieces,  but  maintaining  the 
0  9  standard  for  the  higher  denominations.  Belgium  made  no  change  in  her 
coinage.  These  measures,  taken  without  previous  agreement,  altered  the  con- 
ditions of  the  monetary  exchange  of  four  nations  and  opened  a  new  field  for 
speculation.  Swiss  pieces  were  exchanged  for  Belgian,  and  the  latter  were 
brought  to  Switzerland  for  recpinage  at  a  reduced  standard. 

THE  FORMATION   OF  THE   UNION. 

Belgium,  taking  alarm  at  these  abuses,  made  overtures  to  the  French 
Government  with  a  view  to  a  conference  in  Paris,  at  which  Switzerland  and 
Italy  should  be  represented,  and  which  should  have  for  its  object  to  establish 
a  uniform  system  for  the  coinage  and  circulation  of  fractional  moneys  in  the 
four  coutries.  It  was  further  proposed  that  the  conference  should  have  full 
liberty  of  action,  and  might  either  confine  its  work  to  a  consideration  oi 
monetary  regulations  for  the  four  states  concerned,  or  extend  its  scope  by  lay- 
ing the  foundation  of  a  uniform  circulation  for  the  whole  of  Europe. 

1.10 


AND  THE  INTERNATIONAL  CONFERENCES. 


The  conference  proposition  was  approved  by  Switzerland  and  Italy,  and 
the  International  Commission  began  its  deliberations  in  Paris,  November 
20,  1865.  After  a  protracted  debate,  in  which  Belgium  declared  for  the  stand- 
ard already  established  in  France  and  Italy,  Switzerland  consented  to  the 
0.835  standard.  However,  the  period  fixed  by  the  conference  for  the  with- 
drawal of  the  coins  that  had  been  issued  by  the  various  countries  under  con- 
ditions other  than  those  provided  for,  which  was  to  expire  January  1,  1868, 
was  extended  in  the  case  of  Switzerland  until  January  1,  1879.  After  this 
obstacle  had  been  got  over,  all  parties  being  in  hearty  sympathy  with  the 
project  for  a  monetary  union,  the  other  matters  at  issue  were  not  such  as  to 
cause  anv  decided  conflict  of  opinion.  At  the  meeting  of  December  21,  1865, 
the  conference  adopted  the  fifteen  articles  of  the  famous  agreement  consolidat- 
ing Belgium,  France,  Italy  and  Switzerland  in  a  monetary  union.  The  follow- 
ing is  a  summary  of  that  agreement : 

The  four  contracting  States  were  to  is.ue  coins  of  the  same  weight,  stand- 
ard, and  diameter.  The  percentage  of  allowable  loss  of  weight  by  use  was  to 
be  uniform  in  all  the  States.  The  standard  for  the  five-franc  silver  piece  was 
to  be  .900  fine,  and  for  the  pieces  below  five  francs  .835  fine.  The  coins 
struck  by  each  of  the  contracting  States  were  to  be  accepted  in  the  public 
offices  of  all,  under  these  conditions  :  The  five-franc  piece  without  restric- 
tion, and  the  fractional  coins  up  to  100  francs,  provided  that  coins  which  had 
been  reduced  in  weight  by  use  one  per  cent,  below  the  legal  limit,  or  whose 
effigies  have  been  effaced,  might  be  excluded.  In  the  latter  case,  if  their 
weight  has  been  reduced  by  use  five  per  cent,  below  the  legal  limit,  they  were 
to  be  rest  ruck  by  the  Government  that  issued  them. 

Each  of  the  contracting  governments  engaged  to  accept  from  individuals 
or  from  the  public  offices  of  the  other  States  the  fractional  silver  coin  that  it 
had  issued,  and  to  exchange  it  for  an  equal  value  of  current  money  (gold  pieces 
or  five-franc  pieces),  provided  the  sum  presented"  for  exchange  should  not  be 
less  than  100  francs.  The  quantity  of  fractional  money  to  be  issued  was  fixed 
at  six  francs  per  head  of  the  population.  The  year  of  coinage  was  to  be 
stamped  upon  the  gold  and  silver  pieces  of  each  State.  The  same  agreement 
conceded  the  privilege  of  joining  in  the  compact  to  other  countries  adopting 
the  Union's  monetary  system,  and  named  January  1,  1880,  as  the  date  of  expi- 
ration of  the  compact,  with  a  tacit  extension  fifteen  years  longer,  unless  notice 
of  withdrawal  should  be  given  at  least  a  year  before  the  specified  date  of 
expiration. 

BEGINNING  OF  TROUBLE. 

These  were  the  broad  provisions  of  the  Convention  of  December  23,  1865. 
A  brief  experience  made  its  imperfections  and  deficiencies  felt.  It  was  not 
foreseen  that  the  money  market,  which  in  1865  was  favorable  to  silver,  might 
change  and  favor  gold  ;  and  that,  in  such  not  impossible  contingency,  a  grave 

1.11 


THE   LATIN   MONETARY   tJNION 


problem  would  arise  respecting  (he  final  settlement  of  the  five-franc  pieces — a 
problem,  which,  indeed,  would  be  much  more  serious  than  that  of  subsidiary 
coins.  Several  countries  that  were  expected  to  join  the  Union  entertained 
misgivings  and  were  slow  to  decide.  Austria,  in  1867,  seriously  contemplated 
giving  in  her  adhesion,  but  finally  only  Greece  and  the  Papal  States  came 
over.  By  a  law  enacted  August  10,  1867,  Greece  adopted  the  French  monetary 
system,  and,  profiting  by  the  privilege  vouchsafed  by  Article  12  of  the  conven- 
tion, on  November  18,  1868,  signified  her  desire  for  membership  of  the  Latin 
Union,  which  was  accorded  to  her  by  the  associated  governments  without  any 
dissent. 

The  whole  policy  of  the  Second  Empire  displayed  a  tendency  toward 
groupings  of  nationalities  and  the  formation  of  a  sort  of  European  confedera- 
tion. The  Latin  Union  seemed  to  be  a  first  step  in  that  direction,  and  the  next 
question  opened  up  was  whether  the  system  adopted  by  the  four  countries 
might  not  be  extended  to  embrace  all  Europe.  The  Exposition  of  1867  ap- 
peared to  offer  a  favorable  opportunity.  At  the  instance  of  the  French  Gov- 
ernment, an  international  conference  was  held,  at  which  eighteen  nations  were 
represented.  It  had  its  sessions  in  Paris  from  June  17  to  July  6, 1867.  As  had 
been  done  in  1865,  a  list  of  questions  was  made  up,  which  were  brought  for- 
ward successively  for  discussion.  Nothing  practical  came  of  this  conference 
so  far  as  the  Latin  countries  were  concerned,  but  useful  hints  of  the  inclina- 
tions of  the  different  powers  were  obtained.  Mr.  Meinecke,  the  Prussian  dele- 
gate, signified  his  preference  for  the  single  gold  standard,  and  the  confer- 
ence, with  one  dissenting  vote — that  of  the  delegate  of  the  Netherlands— ex- 
pressed itself  affirmatively  upon  the  following  question  :  "  Is  there  a  possibility 
to  attain  this  end  (uniformity  in  coinages)  upon  the  basis  and  with  the  con- 
dition of  the  adoption  of  the  exclusive  gold  standard,  leaving  to  each  country 
liberty  to  retain  temporarily  the  silver  standard  ?"  Indeed,  from  the  opening 
of  the  conference,  it  was  evident  that  there  was  little  prospect  for  gaining  ad- 
herents for  the  system  of  the  Latin  Union,  whose  essential  feature  was  the 
simultaneous  use  of  gold  and  silver.  This  indication  was  not  permitted  to  go 
unheeded;  for  the  conclusions  arrived  at  by  the  Conference  of  1867  led  Prince 
Bismarck,  promptly  after  the  war  of  1870,  to  substitute  in  Germany  the  single 
gold  standard  for  the  old  silver  standard.  Germany  was  soon  followed  by  the 
Scandinavian  countries — Denmark,  Sweden  and  Norway— which  also  profited 
by  the  decisions  of  the  Conference  of  1867.  Since  1873,  Holland  had  seriously 
taken  up  the  coinage  question,  manifesting  a  preference  for  the  gold  standard, 
which  she  accordingly  adopted  on  June  6,  1875. 

DOWNWARD  COURSE  OF  SILVER. 

Meanwhile  China  and  the  other  far  Eastern  countries  did  not  take  quanti- 
ties to  at  all  compensate  for  the  excessive  production.     Thus  three  agencies 

1.12 


AND  THE  INTERNATIONAL  CONFERENCES. 

worked  together  for  depressing  the  price  of  silver  ;  the  increase  in  the  output 
of  the  mines,  the  change  in  the  monetary  systems  of  Germany,  the  Nether- 
lands and  the  Scandinavian  nations,  and  the  decrease  in  the  Asiatic  demand. 
Moreover,  the  price  of  silver  on  the  London  market,  which  should  have  stood 
at  60id.  per  ounce  if  the  15.5  ratio  is  correct,  took  this  downward  course  : 

Maximam  Minimum 

Per  Ounce.        Per  Ounce. 

1865 61id.  60id. 

1869 61d.  60d. 

1870 62d.  60id. 

1871 61id.  59id.  . 

1874 59id.  57id. 

1875 57|d.  55id. 

With  the  right  of  unlimited  coinage  allowed  to  the  contracting  States,  the 
Latin  Union  served  to  drain  off  the  larger  part  of  the  surplus  silver.  As  the 
average  intrinsic  ratio  of  gold  and  silver  rose  from  15.64  in  1873  to  15.93  in 
1873,  this  left,  notwithstanding  the  loss  of  interest  on  mint  vouchers,  a  suffi- 
cient margin  for  speculation,  since  the  piece  that  circulated  for  five  francs  was 
worth  barely  4.85  francs  at  the  rate  of  the  day.  The  coinage  of  five-franc 
pieces  took  great  strides.     In  1873  there  were  coined  : 

Five-Franc  Pieces. 

In  Belgium 111,704,795 

In  Italy 42,273,935 

In  France 154,649,045 

Grand  total 308,627,775 


This  aggregate  of  308,627,775  francs  represents  the  coinage  of  only  three 
governments,  Switzerland  .having  for  a  long  time  abstained  from  minting. 
The  over-supply  of  the  depreciated  money  alarmed  the  public.  The  Bank  of 
France  rejected  Belgian  and  Italian  five-franc  coins,  as  it  had  the  right  to  do. 
The  Chambers  of  Commerce,  particularly  those  of  Antwerp  and  Lyons,  gave 
decided  expressions  to  their  solicitude,  and  demanded  that  the  gold  standard 
be  adopted.  To  soothe  these  apprehensions,  the  French  and  Belgian  Min- 
isters caused  a  slackening  in  the  coinage  of  five-franc  pieces,  but  more  energetic 
measures  were  needful.  Mr,  Malou,  Belgian  Minister  of  Finance,  took  the 
initiative.  On  November  11,  1873,  he  presented  the  draft  of  a  law  authoriz- 
ing  the  Government  to  limit  or  suspend  the  minting  of  five-franc  pieces  until 
July  1,  1875. 

A  conference  between  the  representatives  of  the  countries  belonging  to  the 
Union  was  held  in  1874  and  another  in  1875.  The  result  of  both  was  the  same — 
to  place  further  limits  on  the  coinage  of  silver.     A  third  conference  met  in 

1.13 


THE    LATIN    MONETAKY    UNION 

Paris  on  January  20,  1876.  The  considerations  thot  had  rendered  limitation 
of  the  silver  coinage  imperative  in  former  years  had  acquired  added  strength 
during  1875.  The  standard  ounce  of  silver  had  fallen  to  55.5  pence  on  the 
London  market  on  June  11,  making  the  ratio  of  gold  and  silver  intrinsically 
16.989.  Throughout  the  year,  the  ratio  ranged  above  16.3.  The  Bank  of 
France  saw  its  stock  of  silver  coin  augmented  enormously,  having  increased 
as  follows  from  1871  to  1875  : 

Francs 

1871 131,700,000 

1872 145,500,000 

1873 150,300,000 

•  1874 329,500,000 

1875 508,700,000 

SUSPENSION   OP  FREE   COINAGE. 

Thus,  in  a  period  of  five  years,  despite  all  endeavors  to  maintain  silver  in 
circulation,  the  stock  had  nearly  quadrupled.  It  was  consequently  needful  to 
preserve  the  restrictions  on  coinage.  In  France,  M.  Leon  Say,  Minister  of 
Finance,  deeming  it  inexpedient  to  have  the  coinage  conducted  at  the  sole 
pleasure  of  individuals,  submitted  to  the  Senate,  on  March  21,  1876,  the  draft 
of  a  measure  authorizing  the  restriction  or  entire  discontinuance  of  minting 
by  decree.  He  said  in  his  explanatory  statement :  '  *  Since  1 865,  there  has 
occurred  a  certain  depreciation  in  the  value  of  silver.  The  Powers  subscribing 
to  the  Convention  have  considered  it  prudent,  sin©e  1874,  to  put  a  check  upon 
the  coinage  of  five-franc  silver  pieces.  A  maximum  coinage  has  been  desig- 
nated for  the  countries  of  the  Union,  amounting  in  1874  to  120,000,000  francs, 
in  1875  to  150,000,000  francs,  and  in  1876  again  to  120,000,000  francs.  The 
share  allotted  to  France  was  60,000,000  francs  in  1874,  and  75,000,000  francs  in 
1875.  This  year  (1876)  it  is  54,000,000  francs,  with  the  privilege  to  coin  at 
least  27,000,000  francs  in  1877;  which  implies  that  our  mints  are  limited  to 
81,000,000  francs  until  a  new  arrangement  shall  obtain.  But  as  the  home 
legislation  of  France  has  not  meantime  been  altered,  the  amount  which  is 
maximum  from  the  point  of  view  of  the  State  is  minimum  as  regarded  by  in- 
terested individuals.  Indeed,  from  the  very  day  that  France  was  empowered 
to  strike  54,000,000  francs  of  five-franc  pieces,  the  owners  of  silver  have  had 
a  perfect  right  to  insist  that  the  Government  neither  can  nor  should  deny  them 
the  privilege  to  convert  their  bullion  into  coin,  so  long  as  the  international 
convention  is  not  violated — in  other  words,  so  long  as  the  prescribed  bounds 
are  not  overstepped.  They  are  therefore  entitled  to  demand  that  five-franc 
pieces  he  minted  for  them  until  the  quota  apportioned  to  France  shall  have 
been  exhausted."  After  calling  attention  to  Belgium's  suspension  of  silver 
coinage  in  1873,  M.  Say  concluded  by  declaring  that,  in  view  of  the  depression 

1.14 


AND  THE  INTERNATIONAL  CONFERENCES. 


of  silver,  respecting  which  it  was  difficult  to  form  a  definite  judgment,  he  be- 
lieved it  to  be  convenient,  without  wishing  to  solve  the  question  whether  the 
single  or  double  standard  was  preferable,  to  assume  a  waiting  attitude  and  not 
increase  the  quantity  of  silver  pieces. 

On  August  6,  1876,  a  decree  was  issued  announcing  that  bullion  and  other 
material  for  the  coinage  of  five-franc  pieces  for  private  account  would  no 
longer  be  accepted.  Meanwhile,  in  the  Belgian  Parliament,  M.  Frere-Orban 
had  interpellated  M.  Malou,  Minister  of  Finance,  on  the  coinage  question.  It 
is  well  to  remember  that  the  allowances  successively  granted  to  the  several 
countries  bore  no  relation  to  their  legitimate  needs,  excepting,  probably,  in  the 
case  of  Greece,  and  that  in  various  instances  they  sei-ved  only  as  a  means  to 
levy  a  convenient  tax  upon  the  circulation  of  neighboring  States,  the  effect  of 
which  was  not  immediately  felt.  To  levy  such  a  tax  the  only  thing  needful 
was  to  buy  filver  at  the  rate  of  the  day — ten  to  twenty -five  per  cent,  less  than 
the  nominal  legal  value— and  throw  it  upon  the  market  after  transformation 
into  five-franc  pieces  at  face  value.  M.  Frere  Orban's  interpellation  bore  upon 
such  transactions.  M.  Malou  confessed  that  he  had  bought  bar  silver  for 
10,800,000  francs  with  three  per  cent,  consols  for  the  purpose  of  making  a 
profit  for  the  State.  In  his  defense  he  said  :  "  Is  the  five-franc  piece  false 
money  ?  It  is  worth  five  francs,  and,  therefore,  I  could  not  make  scandalous 
profits."  This  provided  his  interrogator  with  an  inviting  opportunity,  which 
was  availed  of  in  the  following  severe  words:  "Why  has  the  Government 
bought  and  coined  for  the  account  of  the  State  ?  By  its  own  admission,  to 
make  a  profit.  The  five-franc  piece  is  always  worth  five  francs,  but  whence 
comes  the  profit  ?  It  comes  from  the  circumstances  that  you  legislate  in  recog- 
nition of  fundamental  wrong,  proclaiming  against  truth,  against  plain  evidence, 
and  against  the  nature  of  things — proclaiming,  I  say,  in  perpetuity  that  fifteen 
and  a  half  kilos  of  silver  shall  always  exchange  for  one  kilo  of  gold.  The 
Government,  to  gain  a  miserable  profit,  has  swelled  the  burdens  of  the  State 
in  the  event  that  demonetization  shall  occur,  and  has  increased  the  amoui.t  of 
the  coinage,  as  you  admit."  The  incident  had  no  practical  issue,  but  it 
afforded  a  demonstration  of  the  spirit  of  speculation  that  actuated  the  demands 
for  unnecessary  coinage.  M,  Frere-Orban  enjoyed  a  sort  of  satisfaction  after- 
ward when  the  Belgian  Chambers  were  convoked  by  the  Ministry  to  vole  upon 
an  extension  of  the  law  of  December  18,  1878,  until  January  1,  1879. 

A  SERIES  OP  CONFERENCES. 

On  the  18th  of  February,  1878,  the  United  States  Congress  had  passed  the 
Bland  Bill,  authorizing  the  coinage  of  silver  dollars  and  making  them  legal 
tender.  It  had,  moreover,  decided  that  an  international  conference  should  be 
called  to  establish  an  international  understanding  as  to  the  ratio  between  the 
two  metals.     General  Noyes,  Minister  of  the  United  States  to  France,  made 

1.15 


THE    LATIN   MONETARY   UNION 


overtures  to  that  effect  to  the  French  Government,  which  led  to  the  resullleps 
international  conference  held  in  Paris  in  August,  1878,  As  soon  as  the  French 
Government  received  the  invitation  of  the  United  States  it  sought  the  advice  of 
the  other  governments  comprised  in  the  Latin  Union  regarding  the  reply  to  he 
given.  All  were  of  opinion  that  the  international  conference  should  he 
preceded  by  an  exchange  of  views  on  the  part  of  the  delegates  from  the  Latin 
Union  countries ;  and  for  this  purpose  a  conference  was  called  for  August  30, 
1878,  to  examine  the  conditions  for  a  renewal  of  the  compact  that  was  to 
expire  in  1880.  At  a  preliminary  meeting,  the  Italian  representatives  once 
more  brought  forward  the  old  demand  for  legal  tender  for  gold  and  five-franc 
silver  coins  of  each  of  the  contracting  States  in  all  the  nations  of  the  Union. 
This  Italian  demand,  rejected  in  the  former  conferences,  was  the  logical  outcome 
of  the  Convention  of  1865,  which  required  the  public  oflBcers  of  each  nation  to 
take  unrestrictedly  and  without  possibility  of  exchange  and  settlement  a  foreign 
money  which,  nevertheless,  might  be  refused  by  the  people  to  whom  the  State 
makes  payments,  since  among  them  it  is  not  legal  tender.  If,  on  the  other 
hand,  to  forestall  this  danger,  the  coins  should  be  invested  with  the  legal-tender 
quality,  individuals  would  then  compulsorily  have  to  receive  foreign  money — 
not  note  money,  but  actual— struck  without  the  concurrence  or  surveillance  of 
the  Government  to  which  they  owe  allegiance,  and  which  would  hold  itself 
responsible  without  power  of  control.  All  this  applies  equally  to  gold  money  ; 
but  the  ready  preference  of  the  public  for  the  yellow  metal  always  assures 
foreign  gold  of  easy  circulation,  and  so  it  is  the  less  necessary  to  pronounce  it 
legal  tender  in  order  to  keep  it  current.  To  finally  secure  assent  to  her  claim, 
Italy  agreed  to  a  modifying  provision,  whereby  each  country,  in  the  case  of  a 
breach  of  the  Convention,  was  to  take  back  its  own  five-franc  pieces  that  might 
be  in  the  possession  of  the  other  States  and  pay  gold  for  them.  Upon  this  modi- 
fying clause  turned  subsequently  the  transactions  of  the  Conference  of  1885. 

THE   DIFFICULTIES   OF  A  SETTLEMENT   CLAUSE. 

The  management  of  the  Bank  of  France  did  not  feel  at  all  satisfied  with 
the  outlook,  observing  that  the  practical  effect  would  be  to  deprive  the  bank  of 
all  right  to  refuse,  if  necessary,  foreign  coins,  and  thus  further  swell  the 
stock  in  its  vaults,  which  amounted  nearly  to  270,000,000  francs,  whereon  the 
loss  in  exchange  was  thirteen  to  fourteen  per  cent.  Moreover,  the  question  of 
State  responsibility  for  the  redemption  of  foreign  coins  held  by  the  bank  had 
never  been  settled,  and  on  that  score  the  management  had  grave  anxieties, 
which  found  expression  in  the  reply  sent,  December  5th,  to  the  Minister.  In 
this  the  bank,  after  explaining  that  the  consequences  of  the  1865  Convention  were 
very  burdensome,  and  that  the  receipts  of  foreign  silver  grew  daily  because  of 
the  public's  aversion  for  the  heavy  and  inconvenient  five-franc  pieces,  rejected 
with  all  its  energy  the  proposition  to  establish  legal  tender  for  foreign  coins, 

1.16 


AND  THE  INTERNATIONAL  CONFERENCES. 


whether  silver  or  gold.  It  added  that,  while  it  had  consented  temporarily, 
upon  the  State's  demand  and  in  the  general  interest,  to  take  foreign  pieces,  it 
would  none  the  less  be  entitled  to  protection  under  the  principles  of  the  com- 
mon law.  In  plainer  words,  it  intimated  that  it  would  be  able  to  throw  upon 
the  State  the  loss  that  it  might  have  to  suffer  from  the  depreciation  of  silver. 
Finally,  it  was  stated  that  although  the  Convention  of  1865  had  not  provided  a 
method  for  the  liquidation  of  the  live-franc  silver  pieces,  the  decline  of  ten  to 
fifteen  per  cent,  which  silver  had  undergone  required  imperatively  that  the 
Conference  shoull  not  leave  the  question  without  solution.  This  letter  fur- 
nished the  Minister  of  Finance  a  reason  for  rejecting  the  legal-tender  proposal, 
which  accordingly  was  ultimately  set  aside. 

The  Convention  of  1878,  so  laboriously  constructed,  was  to  terminate  on  the 
1st  of  January,  1886,  unless  extended  by  general  agreement.  Early  in  1884  Italy 
showed  anxiety  for  a  new  convention.  The  Minister  of  Finance,  Signor  Mag- 
liani,  seemed  desirous  of  creating  a  situation  in  which  gold  should  be  the  pre- 
dominating element,  awaiting  circumstances  for  placing  the  country  on  a  basis 
of  absolute  bimetallism.  Switzerland,  having  suffered  some  losses  from  the 
Convention  of  1878,  demanded,  on  January  11, 1884,  the  calling  of  anew  confer- 
ence, to  consider  details  for  a  new  understanding.  The  conference,  after  be- 
ing several  times  delayed,  began  its  deliberations  on  July  20, 1885.  The  wishes 
of  France  were  :  1,  The  continuance  cf  the  Latin  Union  ;  2,  insertion  of  a  set- 
tlement clause  ;  3,  provision  for  taking  measures  to  insure  equal  treatment  of 
gold  and  silver  ;  4,  prohibition  of  all  the  States  of  the  Latin  Union  issuing  and 
maintaining  in  circulation  small  scrip  as  injurious  to  the  circulation  of  silver  ;  5, 
revision  of  the  per  Capita  basis  of  fractional  coins.  Items  3  and  4  had  refer- 
ence mainly  to  Italy.  Her  decree  concerning  the  composition  of  the  metallic 
reserves  of  the  banks  had  been  an  interference  with  the  equality  of  treatment 
due  the  two  metals,  which  was  indicated  by  the  spirit,  if  not  the  letter,  of  the 
Union's  conventions.  By  preserving  350,000,000  francs  of  small  scrip  in  circu- 
lation, she  arbitrarily  narrowed  the  field  open  to  five -franc  pieces  and  frac- 
tional coins.  But  the  principal  matter  of  difficulty  was  the  proposed  settle- 
ment clause — a  clause  which  should  bind  the  different  countries,  at  the  expira- 
tion of  the  Union,  to  take  back  the  silver  pieces  struck  by  them  and,  after 
making  mutual  exchanges,  to  settle  balances  in  gold  or  equivalent  values.  It 
is  easily  understood  how  strong  an  interest  France  had  in  urging  such  a  clause 
(which,  by  the  way,  Italy  and  Switzerland  approved)  when  it  is  stated 
that  on  November  5,  1878,  the  Bank  of  France  had  on  hand  1,031,700,000 
francs  in  silver,  and  on  July  20,  1835,  1,153,900,090  francs — an  in- 
crease of  119,200,000  francs.  Of  the  1885  sum,  according  to  an  esti- 
mate made  at  the  time,  2S.76  per  cent,  was  in  foreign  pieces.  The 
depreciation  of  silver,  which  in  1878  was  ten  to  twelve  per  cent.,  had  reached 
seventeen  to  eighteen  per  cent,  in  1885.     But  the  reasons  that  caused  France  to 


1.17 


THE    LATIN    MONETARY    UNION 


be  so  solicitous  for  a  settlement  clause  were  precisely  the  reasons  inducing 
Belgium  (which,  more  than  any  other  country,  had  contributed  to  the  plethora 
of  silver  by  coinages  far  beyond  her  needs)  to  oppose  the  plan. 

THE  BASIS   OF  SETTLEMENT. 

The  settlement  clause  was  the  occasion  for  protracted  debate,  at  one  stage 
of  which  the  Belgium  delegates  withdrew  from  the  conference.  Finally, 
toward  the  close  of  1885,  the  Belgian  Government  suggested  the  following 
arrangement :  "  If  a  settlement  shall  occur,  France  will  amass  the  Belgian 
coins  circulating  in  the  States  of  the  Union,  and  will  herself  proceed  to  ex- 
chang3  them  with  Belgium.  If,  after  balancing,  Belgium  shall  still  be  debtor 
to  France,  the  difference  shall  be  divided  into  two  parts.  The  Belgian  Gov- 
ernment will,  within  five  years,  pay  for  the  one-half  in  gold  and  drafts  on 
France,  and  the  other  half  shall  be  sent  back  through  commercial  and  exchange 
channels.  Belgium  shall  make  no  change  in  her  monetary  system  of  a  char- 
acter to  interfere  with  this  taking  back  of  coins,  and  she  guarantees  that  the 
balance  to  be  settled  shall  not  be  in  excess  of  300,000,000  francs."  This  was 
regarded  as  an  acceptable  offer,  and  it  was  approved  by  the  French  Govern- 
ment in  principle. 

But  another  stumbling  block  had  to  be  got  over.  In  the  protocol  of  Novem- 
ber 6,  1885,  it  was  said  in  substance  :  "  In  the  event  that  one  of  the  govern- 
ments of  the  Union,  either  directly  or  through  the  instrumentality  of  bank 
issue,  sliall  effect  an  arrangement  with  the  Belgian  Government  for  again 
redeeming  its  own  five-franc  pieces,  such  arrangement  shall.be  submitted  to  the 
other  States  of  the  Union  for  approval.  In  case  of  non-approval,  each  of  the 
other  States  will  have,  with  regard  to  the  State  effecting  such  arrangement,  the 
choice  between  agreeing  to  the  arrangement  or  acting  in  pursuance  of  the  settle- 
ment clause  already  adopted."  The  Italian  Government,  informed  of  the 
understanding  arrived  at  between  France  and  Belgium,  claimed  the  right  to 
reserve  to  itself  the  privileges  granted  by  the  protocol.  This  gave  rise  to  a 
possibility  that  circumstances  might  come  to  pass  which  would  make  it  pref- 
erable for  France  to  hold  Italy  to  the  settlement  clause,  and  to  send  back  the 
Belgian  pieces  at  the  risk  and  peril  of  France.  Nevertheless,  as  it  was  all- 
important  that  Belgium  should  stay  in  the  Union,  it  was  determined,  after  long 
negotiation,  that  France  and  Italy  should  mutually  claim  the  benefit  of  the  con- 
ditions given  to  the  Belgian  Government  as  to  the  regulation  of  their  accounts, 
so  that  the  maximum  balance  of  the  repatriated  coin  should  be  200,000,000 
francs  so  far  as  Belgium  was  concerned.  Greece  reserved  the  right  of  choice 
at  the  time  when  she  should  abandon  the  regime  of  forced  currency. 

To  provide  for  the  special  case  of  Switzerland — which,  having  struck  no 
five-franc  pieces,  might  have  suffered  from  dearth  of  coin  under  the  proposed 
mode  of  settlement — it  was  decided  that  France,  Italy  and  Belgium  should  settle 

1.18 


AND   THE   INTERNATIONAL   CONFERENCES. 


**  at  sight "  in  Swiss  five-franc  silver  pieces  and  ten-franc  gold  pieces  and  higher 
denominations  for  the  moneys  presented  to  them  by  the  Swiss  Confederation. 

The  Union  of  1865  was  prolonged  to  December  31,  1890,  by  the  terms  of 
the  additional  act  of  Dc^cember  13,  1885,  which  restored  Belgium  to  member- 
ship in  it.  Silver  coinage  was  further  suspended,  not  to  be  resumed  without 
the  unanimous  assent  of  the  contracting  States.  Any  State  desiring  to  have 
free  coinage  again. was  required  as  a  preliminary  to  redeem  in  gold  and  at  sight 
the  silver  coins  of  its  mintage  that  circulated  in  other  nations.  The  Conven- 
tion was  for  five  years,  and  therefore  was  to  expire  December  31,  1890.  But 
none  of  the  contracting  States  had  any  interest  in  its  dissolution,  and  it  was 
extended  from  year  to  year  by  tacit  agreement.  Since  December  81,  1890,  the 
Bank  of  France  has  yearly  engaged  to  receive  over  its  counters  the  coins  of  the 
Latin  Union  for  the  account  of  the  Treasury.  The  Convention  survives  mainly 
because  the  circumstances  of  the  associated  nations  render  it  impossible  for 
them  to  dissolve  it.  Switzerland,  having  coined  but  a  practically  insignidcaut 
amount  of  five-franc  pieces,  might  step  out  without  harm;  but  Italy  and 
Belgium  would  be  exposed  to  very  grave  embarassment  if  they  should  be 
obliged  to  take  back  the  five-franc  pieces  that  France  holds.  As  for  France, 
she  fears  that  by  giving  notice  of  her  retirement  from  the  Union  the  exchanges 
of  her  neighbors  would  be  deranged,  and  she  would  suffer  from  the  counter- 
shock.  Notwithstanding,  therefore,  the  precarious  footing  on  which  it  stands, 
the  Latin  Union  is  renewed  from  year  to  year  tacitly,  and  the  probability  is 
that  it  may  continue  for  a  long  time  to  come. 

After  passing  through  an  experience  like  this,  it  would  be  strange,  indeed, 
if  in  any  of  the  countries  of  the  Latin  Union  there  should  be  any  faith  in  the 
ability  of  the  United  States  to  maintain,  single-handed,  the  double  monetary 
standard  with  the  piivilege  of  the  free  and  unrestricted  coinage  of  silver  at  the 
ratio  of  16  to  1.  In  the  other  countries  which  have  been  more  or  less  interested 
spectators  of  the  experiment  there  never  has  been  any  serious  doubt  about  the 
certain  failure  of  such  an  experiment. 

A  SERIES  OP  CONFERENCES. 

The  United  States  have  made  numerous  efforts  to  secure  by  international 
agreement  an  enlarged  use  for  silver,  as  the  following  brief  summary  of  the 
work  of  successive  monetary  conferences  will  show.  As  already  stated,  the 
first  international  monetary  conference  was  that  of  1867,  It  met  on  the  invita- 
tion of  the  French  Government  "to  consider  the  question  of  uniformity  of 
coinage,  and  to  seek  for  the  bai-is  of  ulterior  negotiations."  It  came  together 
in  the  City  of  Paris  on  June  17.  Eighteen  of  the  principal  countries  of  Europe 
and  the  United  States  were  represented  at  it,  the  latter  by  Hon.  Samuel  B. 
Buggies,  of  New  York.  The  conference  voted  unanimously  against  the  adop- 
tion  by  the  countries  represented  by  the  silver  standard  exclusively,  and  unani- 

1.19 


THE  LATIN  MONETARY  UNION 


mously,  with  the  exception  of  the  Netherlands,  in  favor  of  the  single  gold 
standard.  At  the  final  session  of  the  conference  it  was  voted  to  refer  these  and 
other  decisions  reached  to  the  several  States  for  diplomatic  action,  and  that 
information  of  the  action  of  the  States  should  be  transmitted  to  the  French 
Government,  which  should  have  power  to  reassemble  the  conference.  The 
conference  adjourned  July  6,  and  was  not  reassembled. 

The  second  international  monetary  conference  was  that  of  1878.  It  was 
called  by  the  United  States.  The  Act  of  February  28,  1878,  directed  the 
President  to  invite  the  governments  of  Europe  to  join  in  a  conference 
to  adopt  a  common  ratio  between  gold  and  silver  for  the  purpose  of 
establishing-  internationally  the  use  of  bimetallic  money  and  securing  fixity  of 
relative  value  between  these  metals.  The  conference  met  at  Paris  on  the  IGth 
of  August.  Twelve  countries  were  represented,  the  United  States  by  Reuben 
E,  Fenton,  of  New  York ;  W,  S.  Groesbeck,  of  Ohio,  and  Francis  A.  Walker,  of 
Conn.  S,  Dana  Horton,  the  secretary  of  the  American  delegation,  was  admitted 
as  a  member.  It  is  worthy  of  note  that  Germany  declined  to  send  delegates  to 
this  conference. 

At  the  second  session  LIr.  Groesbeck,  on  behalf  of  the  United  States,  laid 
two  propositions  before  the  conference  :  (1)  That  it  was  not  to  be  desired  that 
silver  be  excluded  from  free  coinage  in  Europe  and  the  United  States.  (2) 
That  the  use  of  both  gold  and  silver  as  unlimited  legal  tender  may  be  safely 
adopted  by  equalizing  them  at  a  ratio  fixed  by  international  agreement. 

These  propositions  were  discussed  in  every  phase  by  the  delegates  of  the 
various  States  during  the  seven  sessions  of  the  conference.  The  collective 
answers  to  them  of  all  the  European  delegates,  save  those  of  Italy,  were 
presented  by  the  president,  Mr.  Leon  Say,  and  were : 

(1)  That  it  was  necessary  to  preserve  in  the  world  the  monetary  func- 
tion of  silver  as  well  as  of  gold,  but  that  the  choice  of  one  or  the  other, 
or  both  simultaneously,  should  be  governed  by  the  special  situation  of  each 
State  or  group  of  States.  (2)  That  the  question  of  the  restriction  of  the 
coinage  of  silver  also  should  be  left  to  the  discretion  of  each  State  or  group 
of  States.  (3)  That  the  difference  of  opinion  that  had  appeared  excluded 
the  adoption  of  a  common  ratio  between  the  two  metals.  The  conference 
adjourned  on  the  29th  of  August. 

The  third  international  monetary  conference,  that  of  1881,  was  called 
in  January  of  that  year  by  the  Governments  of  France  and  the  United  States 
"to  examine  and  adopt,  for  the  purpose  of  submitting  the  same  to  the  gov- 
ernments represented,  a  plan  and  a  system  for  the  establishment  of  the  use  of 
gold  and  silver  as  bimetallic  money,  according  to  a  settled  relative  value  between 
these  metals."  Nineteen  countries  were  represented.  The  representatives 
of  the  United  States  were  Hon.  William  M.  Evarts,  of  New  York;  Allen  G. 
Thurman,  of  Ohio;  Timothy  0.  Howe,  of  Wisconsin,  and  S,  Dana  Horton 

1.20 


AND  THE  INTERNATIONAL  CONFERENCES. 


Like  the  delegates  of  the  previous  conferences,  those  of  the  present  one 
were  marked  with  the  highest  ability  and  by  a  thorough  mastery  on  the  part 
of  the  several  delegates  of  monetary  science.  They  covered  twelve  sessions. 
At  the  thirteenth  Mr.  Evarts,  on  behalf  of  the  delegates  of  France  and  the 
United  States,  and  in  the  name  of  their  respective  governments,  read  a 
declaration  in  which  they  stated. 

(1)  That  the  depression  and  great  fluctuations  of  the  value  of  silver  rela- 
tively to  gold  are  injurious  to  commerce  and  to  the  general  prosperity,  and 
the  establishment  of  a  fixed  ratio  of  value  between  them  would  produce  the 
most  important  benefits  to  the  commerce  of  the  world, 

(2)  That  a  bimetallic  convention  entered  into  between  an  important  groap 
of  States  for  free  coinage  of  both  silver  and  gold  at  a  fixed  ratio  and  with  full 
legal-tender  faculty  would  cause  and  maintain  a  stability  in  the  relative  value 
of  the  two  metals  suitable  to  the  interests  and  requirements  of  commerce. 

(3)  That  any  ratio  now  or  lately  in  use  by  any  commercial  nation,  if  so 
adopted,  could  be  maintained,  but  that  the  adoption  of  the  ratio  of  15^  to 
1  would  accomplish  the  object  with  less  disturbance  to  existing  monetary  sys- 
tems than  any  other  ratio. 

(4)  That  a  convention  which  should  include  England,  France,  Germany  and 
the  United  States,  with  the  concurrence  of  other  States,  which  this  combina- 
tion would  assure,  would  be  adequate  to  produce  and  maintain  throughout  the 
commercial  world  the  relation  between  the  two  metals  that  such  convention 
should  adopt. 

After  this  declaration  had  been  read,  certain  members,  through  the  presi- 
dent, expressed  a  desire  for  adjournment,  but  this  met  with  opposition  from 
Mr.  Forsell,  delegate  from  Sweden,  who  thought  that  an  adjournment  would 
give  a  character  of  permanence  to  the  conference,  whereas  it  was  better  to 
acknowledge  at  once  that  bimetallism  had  collapsed  and  that  the  resolutions  of 
the  European  delegates  at  the  conference  of  1878  should  be  reaffirmed.  After 
a  short  recess  the  president  read  a  regolution  reciting  that,  in  view  of  the 
speeches  and  observations  of  the  delegates  and  the  declarations  of  the  several 
governments,  there  was  ground  for  believing  that  an  understanding  mi^^ht  be 
established  between  the  States  that  had  taken  part  in  the  conference,  but  that 
^twas  expedient  to  suspend  its  meetings;  that  the  monetary  situation  might 
in  some  States  call  for  governmental  action,  and  that  there  was  reason  for 
giving  opportunity  for  diplomatic  negotiations.  The  conference  was  adjourned 
to  April  12,  1882.     It  was  never  reconvened. 

The  fourth  international  monetary  conference  was  called  by  the  Govern- 
ment of  the  United  States  "for  the  purpose  of  conferring  as  to  what  measures, 
if  any,  can  be  taken  to  increase  the  use  of  silver  as  money  in  the  currency- 
system  of  nations."  The  conference  met  at  Brussels  on  the  32d  of  November, 
1892.     Twenty   countries    were   represented.     The   delegates  of   the   United 

1.21 


THE   LATIN   MONETARY  UNION. 


States  were  Hon.  William  B.  Allison,  Hon.  John  P.  Jones,  Hon.  James  B. 
McCreary  Mr.  Henry  W.  Cannon,  Mr.  E.  Benjamin  Andrews,  and  Hon. 
Edwin  [I.  Terrell. 

In  accordance  with  the  wish  expressed  by  the  conference,  the  delegates  of 
the  United  States,  after  full  consultation,  prepared  a  declaration  and  pro- 
gramme which  embodied  the  following  resolution  : 

"  That  in  the  opinion  of  this  conference  it  is  desirable  that  some  measure 
should  be  found  for  increasing  the  use  of  silver  in  the  currency  systems  of  the 
nations." 

This  resolution  was  presented  to  the  conference  at  the  second  session.  On 
that  occasion,  Sir  Rivers  Wilson,  speaking  in  the  name  of  the  entire  delegation 
of  Great  Britain  said  : 

"  We  accept  the  resolution  of  the  delegates  of  the  United  States  as  it  stands, 
adding  only  this  reservation  and  this  explanation,  that  we  consider  it  as  being  in 
fact  a  recapitulation  of  the  substance  of  the  invitation  which  has  been  addressed 
to  the  different  governments,  and  which  has  been  accepted  by  them." 

Similar  declarations  were  made  by  France,  Spain,  the  Netherlands  and 
other  nations. 

The  programme  of  the  United  States  was  discussed  in  all  its  phases  by  the 
conference  substantially  in  the  order  presented.  Conformably  to  the  sug- 
gestions of  the  programme,  several  projects,  having  in  view  the  enlarged  use 
of  silver  without  contemplating  its  complete  rehabilitation,  were  presented  to 
the  conference.  These  plans,  together  with  the  subordinate  projects  mentioned 
in  the  programme,  were  referred  at  the  third  session  of  the  conference  to  a 
committee  of  twelve.  This  committee  made  two  reports.  The  committee 
reported  affirmatively  upon  one  proposition,  namely :  That  it  was  wise  to  with- 
draw from  monetary  circulation  all  the  gold  coins,  and  all  paper  money 
redeemg-ble  in  gold  of  a  less  denomination  than  1  pound,  20  francs,  or  20 
marks,  and  substitute  silver  money  for  them.  As  to  the  other  plans,  though 
some  of  them  were  favored  in  principle,  they  were  not  reported  upon  affirm- 
atively, because  they  were  not  broad  enough  nor  presented  in  sufficient  detail 
to  justify  a  favorable  report  upon  them. 

In  the  discussion  of  these  various  proposals  and  plans  in  the  lull  meetings 
of  the  conference,  the  attitudes  of  all,  or  nearly  all,  the  governments  were 
disclosed.  The  utterances  of  the  delegates  indicated,  however,  what  measures 
the  governments  were  unwilling  to  adopt  rather  than  how  far  they  were  willing 
to  go  to  secure  the  enlarged  use  of  silver  as  proposed  by  the  President  in  his 
invitation. 

The  conference  adjourned  on  December  17,  1892,  after  deciding,  should  the 
governments  approve,  to  meet  again  on  May  30, 1893.  The  governments  whose 
adhesion  was  indispensable  to  any  international  agreement  did  not  approve, 
and  the  conference,  as  an  accredited  representative  body,  did  not  reassemble. 

1.22 


THE  CLAIM  THAT  SILVER  CAN  BE  RAISED  TO  GOLD  VALUE. 


THE  CLAIM  THAT  SILVER  CAN  BE  RAISED  TO 
GOLD  VALUE. 

In  addition  to  the  claim  made  by  the  candidate  of  the  two  divisions  of  the  Silver  party  that 
the  policy  vehich  he  represents  is  not  a  new  one,  there  is  the  additional  claim  that  under  that 
policy  the  bullion  value  of  silver  would  so  advance  that  the  commercial  and  legal  ratio 
between  the  two  metals  would  be  identical.  All  experience  shows  the  absurdity  of  this  latter 
claim,  which  is  also  at  variance  with  the  promise  that  free  silver  would  mean  higher  prices  for 
all  products.  The  idea  that  the  quantity  of  money  in  circulation  governs  the  rise  or  fall  of 
prices  has  been  proved  to  be  baseless. 

In  face,  however,  of  the  demonstrated  impossibility  of  maintaining  parity 
between  gold  and  silver  under  a  system  of  free  silver  coinage,  the  candidate  of 
the  two  wings  of  the  Silver  party  is  rash  enough  to  contend  that  the  free  and 
unlimited  coinage  by  the  United  States  alone  will  raise  the  bullion  value  of  sil- 
ver to  its  coinage  value  and  thus  make  silver  bullion  worth  $1.29  per  ounce  in 
gold  throughout  the  world.  He  has  the  temerity  to  add  that  this  proposition 
is  in  keeping  with  natural  laws,  not  in  defiance  of  them.  It  is  a  fundamental 
fact  of  finance  that  gold  and  silver  have  a  relative  international  value  which 
no  nation  alone  can  do  more  than  temporarily  disturb  ;  and  the  conclusion 
that  the  inferior  will  drive  out  the  superior  currency  is  at  least  as  old  as  the 
14tli  century,  when  Nicholas  Oresme,  Bishop  of  Lisieux,  told  Charles  V.  of 
France  that  if  the  fixed  legal  ratio  of  coins  differs  from  the  natural  or  market 
value  of  the  metals,  the  coin  which  is  underrated  entirely  disappears  from  cir- 
culation, and  the  base  coin  alone  remains  current,  to  the  ruin  of  commerce. 
The  same  conclusion  was  stamped  with  the  authority  of  Copernicus,  160  years 
later,  and  was  explained  to  Queen  Elizabeth  by  Sir  Thomas  Gresham  half  a 
century  later  still.  The  fundamental  law  of  coinage  which  has  come  to  be 
known  as  Gresham's  law  has  been  found  to  be  universally  true.  As  MacLeod 
remarks  :  "  It  is  not  confined  to  single  and  separate  states  ;  it  is  not  limited  in 
time  or  space  ;  it  is  absolutely  universal ;  and  it  is  equally  impossible  for  the 
whole  world  to  maintain  coins  of  two  or  more  metals  in  circulation  together  in 
unlimited  quantities  at  a  fixed  legal  ratio  which  differs  from  the  natural  or 
market  value  of  the  metals  as  it  is  for  single  and  separate  states  to  do  so." 

"It  is  exactly  the  same  in  all  cases  in  which  persons  are  allowed  to  pay 
their  debts  in  things  which  have  nominally  the  same  value,  but  in  reality  are 
of  different  values.  When  persons  are  allowed  to  pay  their  rents  in  kind,  they 
naturally  select  the  worst  portions  of  the  produce  to  pay  their  landlords,  and 
keep  the  best  portions  for  themselves." 

"  If  merchants  received  an  order  for  so  many  yards  of  cloth,  and  the  law 
allowed  two  different  yard  measures  to  be  used — one  of  three  feet  and  one  of 
two  feet — merchants  would  naturally  fulfill  their  orders  in  yards  of  two  feet 

1.33 


THE    CLAIM   THAT   SILVER 


rather  than  in  yards  of  three  feet.  It  is  only  natural  that  persons  should  pay 
their  debt3  in  the  cheapest  form  to  themselves. 

"  So  if  the  law  allows  debtors  to  pay  their  debts  in  coin  of  different  metals 
which  are  rated  equally  in  law,  but  whose  values  differ  in  the  market  of  the 
world,  they  will  naturally  pay  their  debts  in  the  coin  which  is  overrated,  and 
keep  the  coin  which  is  underrated  at  home.  Then  inevitably  the  coin  which  is 
underrated  disappears  from  circulation,  and  the  coin  which  is  rated  above  its 
natural  or  market  value  alone  remains  current ;  and  this  is  true  whether  single 
and  separate  states  do  so,  or  whether  the  whole  world  does  it.  If,  then,  the 
whole  world  were  to  agree  to  rate  a  coin  below  its  market  value,  it  would 
inevitably  disappear  from  circulation ;  for  the  whole  world  can  no  more  by 
universal  agreement  make  nine  equal  to  twelve  than  any  separate  states  can." 

But  the  Silver  party  and  its  candidate  argue  that  they  merely  apply  the  law 
of  supply  and  demand  to  silver  when  they  say  that  a  new  demand  for  silver, 
created  by  law,  will  raise  the  price  of  silver  bullion.  It  is  unquestionably  true 
that  the  suspension  of  the  coinage  of  silver  in  the  most  important  civilized 
states  has  tended  to  depress  its  price.  But  in  all  the  world's  history  there 
never  was  a  time  in  which  so  much  silver  was  coined  as  during  the  period  that 
has  witnessed  its  greatest  decline.  Leaving  Mexico  and  the  South  American 
states  entirely  out  of  consideration,  there  were  coined  in  Europe,  the  United 
States  and  India  in  the  years  1851  to  1860  an  annual  average  (at  the  old  ratio) 
of  $38,794,000.  During  the  decade  1861-1870,  when  the  production  of  silver 
in  the  United  States  began  to  be  developed,  and  when  the  cotton  famine 
enormously  increased  the  payments  due  to  India  on  account  of  international 
trade,  this  annual  average  coinage  amounted  to  $80,020,000.  But  even  this 
figure,  which  up  to  that  period'  had  never  been  reached,  is  exceeded  by 
the  average  amount  of  coinage  (Mexico  and  South  America  not  included)  in 
the  years  1887  to  1891,  when  the  price  of  silver  had  fallen  as  low  as  43.]d.  in 
London.  The  average  coinage  of  those  yetirs  amounted  to  no  less  than 
$113,000,000  (at  the  old  ratio  of  value),  and  this  sum  does  not  include  the 
storage  of  silver  bullion  by  the  United  States. 

The  known  aggregate  coinage  of  silver  during  the  sixteen  years  1876-1891 
— that  is,  during  the  period  of  the  greatest  depreciation  of  the  metal — 
amounted  to  $2,110,560,000.  From  this  we  must  deduct  $71,000,000,  which 
were  recoined  from  old  coins  into  German  and  Scandinavian  divisional  coins  ; 
but  this  amount  is  offset  by  the  monetary  silver  bullion  brough  into  the  United 
States  Treasury  under  the  law  of  July  14, 1890.  Moreover,  this  sum  embraces 
about  $950,000,000  of  Mexican  piasters,  one-half  of  which  may  have  served  as 
coinage  material.  The  remainder  went  to  China,  or  may  be  considered  the 
equivalent  of  the  bar  silver  exported  to  China,  which  serves  monetary 
purposes.  The  net  silver  coinages,  therefore,  of  this  metal  would  have  to  be 
put  at  at  least  $1,560,000,000.     On  the  other  hand,  the  production  of  silver 

1.24 


CAN   BE   RAISED    TO    GOLD   VALUE. 


duriog  the  same  period,  according  to  Soetbeer,  amounted  to  $2,109,394,000. 
Thus,  the  net  coinage  was  fully  74  per  cent,  of  the  production,  while  the  gross 
amount  of  coinage  shows  that  a  quantity  of  silver  as  large  as  or  even  larger 
than  that  of  the  silver  newly  produced  passed  through  the  mints.  The  coinage 
of  silver,  it  is  true,  had  been  suspended  in  France.  It  could  no  longer  be 
turned,  for  the  convenience  of  holders,  into  five-franc  pieces,  but  in  lieu 
ihereof  it  found  a  place  in  the  currency  of  the  United  Stales,  to  the  amount 
annually  of  $70,000,000— a  sum  six  times  as  great  as  the  average  annual  coin- 
age of  France  during  the  time  of  silver's  supremacy. 

FOB  WHOSE   BENEFIT  ? 

But  if  it  were  to  be  conceded  that  the  United  Statesshouldbeable  to  achieve 
the  impossible,  and  so  raise  the  price  of  silver  that  its  mercantile  ratio  with 
gold  should  correspond  to  the  legal  ratio,  who  would  be  benefited  ?  Would 
prices  rise,  the  burden  of  debts  diminish  and  everybody  feel  sensibly  richer  ? 
It  is  $1.29  per  ounce  in  gold  that  silver  is  to  be  worth  in  the  markets  of  the 
world,  according  to  the  candidate  of  the  silver  party,  and  the  prices  of  other 
products  of  human  labor  will,  of  course,  be  measured  in  gold  too.  The  stan- 
dard of  price  will  be  the  same  as  it  is  now,  only  silver  will  have  advanced,  by 
a  miracle,  to  the  price  at  which  the  coinage  ratio  of  16  to  1  expresses  its  market 
value.  Precisely  how  it  is  to  be  kept  there  is  a  detail  to  which  the  candidate 
does  not  give  any  attention.  If  the  operation  of  the  law  of  supply  and  demand 
can  raise  the  value  of  silver,  it  must  also  be  able  to  depress  it. 

There  must  come  a  time,  even  assuming,  what  is  palpably  untrue,  that 
there  is  a  universal  desire  for  an  increase  of  the  silver  coinage  by  the  people  of 
this  country,  when  there  will  be  silver  enough  coined  and  stored  to  satisfy  all 
demands  for  it.  Then  the  price  will  go  down  again,  for,  Mr.  Bryan  to  the 
contrary  notwithstanding,  there  will  be  no  interruption,  but  rather  a  tremen- 
dous impetus  in  the  supply.  When  St.  Clair-Duport  published  his  book  on 
Mexico,  some  fifty  years  ago,  he  said  that  the  time  would  come,  sooner  or  later, 
when  the  production  of  silver  would  have  no  other  limits  than  those  imposed 
on  it  by  the  contstantly  increasing  decline  of  its  value.  The  old  Frenchman 
knew  more  about  his  subject  than  Mr.  Bryan  does,  and  even  that  eminent 
advocate  of  the  use  of  silver,  the  late  Professor  Suess,  writing  in  1893,  adds  to 
the  statement  above  quoted  the  following  :  "This  limit,  however,  is  as  yet  far 
from  being  attained,  despite  the  considerable  fall  in  price.  Even  at  the  present 
day,  on  the  Andes  of  South  America,  dry  ores  are  worked  with  profit,  under 
the  most  unfavorable  external  circumstances.  Even  at  the  present  day  in 
Peru  small  smelting  furnaces  are  in  profitable  operation,  for  which  at  these 
great  altitudes  there  is  no  other  fuel  than  the  droppings  of  the  llamas.  In 
those  regions  there  is  yet  ample  room  for  lightening  the  labor.  It  must  be  said 
openly  that  all  hope  of  improvement  in  monetary  relations  through  decline  of 

1.25 


THE    CLAIM   THAT    SILVER 


silver  production  presupposes  as  yet  a  very  material  fall  in  the  price  of 
silver." 

THE  "QUANTITY   THEORY." 

The  Bryan  idea  appears  to  be  that  the  Government  could  accomplish  more 
easily  under  a  system  of  free  silver  coinage  what  it  does  now  under  coinage 
for  its  own  account  only — the  maintenance  of  parity  between  all  the  elements 
'of  the  currency.  But  according  to  the  axiom  that  things  which  are  equal  to 
the  same  thing  are  equal  to  one  another,  the  prices  of  the  Bryan  regime, 
measured  by  the  same  gold  standard  as  now  prevails,  or  by  a  silver  standard 
absolutely  convertible  with  it,  would  still  be  the  prices  of  to-day.  The  only 
theory  on  which  a  different  result  could  be  predicated  would  be  what  is 
known  as  the  *  *  quantity  theory  "  of  money  value,  and  which  is,  indeed,  one  of 
the  most  obstinate  of  the  fallacies  held  by  the  free  silver  party.  The  theory  is 
that  the  prices  of  commodities  are  determined  by  the  ratio  which  the  quantity 
of  metallic  money  bears  to  the  quantity  of  commodities,  or  that  changes  in 
the  volume  of  money,  or  in  the  transactions  to  be  carried  out  by  money,  have 
as  complete  an  effect  on  the  prices  of  commodities  as  changes  in  the  supply 
and  demand  for  commodities.  Hence  the  assumption  that  there  is  not  gold 
enough  in  existence  to  affect  the  commercial  exchanges  of  the  world,  and 
hence  the  claim  of  the  Populistic-Democratic  platform  that  there  has  been 
from  the  suspension  of  silver  coinage  an  appreciation  of  gold  and  a  corre- 
sponding fall  in  the  price  of  commodities. 

It  may  be  useless  to  argue  against  the  silver  delusion  by  pointing  out  how 
relatively  insignificant  are  the  proportion  of  the  world's  stock  of  either  or  both 
of  the  metals  called  precious  to  the  volume  of  the  transactions  of  the  world's 
trade.  For  if  the  significance  of  that  point  were  understood  there  would  be 
no  delusion.  But  it  may  be  worth  while  to  insist  on  the  truth  of  the  some- 
what trite  statement  that  trade,  in  its  most  advanced  form,  has  not  ceased 
to  be  barter-" the  exchange  of  the  results  of  one  man's  labor  against 
those  of  another.  As  a  matter  of  relative  value,  it  is  just  as  accurate 
to  say  that  a  bushel  of  wheat  is  worth  two  pounds  of  a  certain  grade  of 
tea  in  New  York  as  it  is  to  say  that  either  can  be  exchanged  for  the  equivalent 
of  70  cents  in  gold.  A  cargo  of  wheat  can  be  exchanged  for  a  certain  num- 
ber of  boxes  of  tea  without  any  gold  being  used  in  the  transaction.  It  is  only 
when  the  difference  in  value  between  a  great  mass  of  commercial  exchanges, 
involving  perhaps  a  great  many  countries,  comes  to  be  adjusted,  that  the 
country  which  has  nothing  to  offer  in  settlement  which  the  rest  of  the  world 
is  ready  to  take  is  called  on  to  pay  in  gold.  The  United  States  can  buy  coffee 
in  Brazil  by  means  of  cotton  delivered  in  Liverpool,  just  as  readily  as  it  can  buy 
the  product  of  English  potteries  by  the  same  kind  of  exchange.  The  exchange- 
able value  of  a  bushel  of  wheat  or  a  bale  of  cotton  may  depend  on  the  world's 
stock  in  these  commodities,  because  they  are  things  actually  exchanged,  and 

1.26 


CAN   BE   RAISED    TO    GOLD   VALUE. 


their  price  is  naturally  governed  by  the  law  of  supply  and  demand  ;  hut 
millions  of  transactions  in  all  forms  of  merchandise  may  be  conducted  without 
the  use  of  any  '  *  standard  money  "  whatever,  and  in  point  of  fact  the  propor- 
tion that  the  amount  of  coin  used  bears  to  the  sum  of  the  world's  exchanges 
is  not  only  an  insignificant  but  a  constantly  diminishing  fraction  of  the  whole. 
The  combined  value  of  the  foreign  commerce  of  England,  Germany  and  the 
United  States,  which  was  $2,449,000,000  in  1850,  had  increased  to  $8,904,000,000 
in  1890,  and  there  was  probably  more  gold  employed  in  the  settlement  of  the 
balance  between  these  countries  in  the  former  year  than  in  the  latter,  though 
the  value  of  the  transactions  had  nearly  quadrupled,  and  their  volume  very 
much  more  than  quadrupled. 

ECONOMIES  IN*THE  USE   OF  MONEY. 

To  illustrate  the  role  played  by  money  in  commerce,  take  the  simplest  form 
of  a  commercial  transaction  :  A  and  B  are  indebted  to  each  other.  A  owes 
B  $50,  and  B  owes  A  $65.  If  each  sends  a  clerk  to  the  other  to  demand 
payment  in  money ;  it  would  require  $115  in  money  to  discharge  the  two 
debts.  If  A  sends  $50  to  B  to  discharge  his  debt,  and  B  sends  back  the  same 
$50  with  $15  added  in  settlement  of  his  debt,  the  amount  of  money  needed 
to  discharge  the  two  debts  is  reduced  to  $65.  But  if  A  and  B  meet  and  set 
off  their  mutual  amounts  of  debt  against  each  other  and  pay  only  the  differ- 
ence in  money,  the  two  debts  are  discharged  by  the  use  of  ouly  $15.  The 
amount  of  money  required  to  carry  on  any  given  amount  of  business  must 
vary,  therefore,  according  to  the  method  adopted  of  settling  debts.  But  the 
most  economical  of  the  three  methods  above  described  represents  only  a 
slight  approach  to  the  refinement  of  the  actual  practice  of  the  commercial 
world.  If  debtors  and  creditors  deal  at  the  same  bank,  they  settle  their 
obligations  to  each  other  by  what  amounts  simply  to  the  transfer  of  a  credit 
from  one  account  to  another,  and  there  is  complete  payment  without  the  use 
of  any  money  whatever.  Under  the  Clearing-house  system,  a  number  of 
associated  banks  become  for  all  practical  purposes  one  great  bank,  and  there 
is  a  daily  aggregate  of  transactions  reaching  enormous  figures,  balanced  with 
an  infinitesimal  amount  of  exchange  of  "  standard  money."  The  theory  that 
the  prices  of  commodities  are  determined  by  the  ratio  which  the  quantity  of 
metallic  money  bears  to  the  quantity  of  commodities  is  the  exploded  fallacy 
of  the  last  generation,  which  had  indeed  been  rejected  by  generations  pre- 
ceding. The  French  merchants  of  two  or  three  hundred  years  ago  discov- 
ered that  the  nearer  debts  could  be  made  to  balance  each  other  the  less  need 
there  was  for  the  employment  of  money.  Instead,  therefore,  of  making  their 
debts  payable  at  their  own  houses,  where  they  would  have  to  keep  large 
amounts  of  specie  to  meet  them,  they  made  them  payable  at  the  great  con- 
tinental fairs,  which  were  held  every  three  months.     On  a  fixed  day  at  the 

1.27 


THE   CLAIM   THAT   SILVER 


fair  the  merchants  met  together  and  exchanged  their  acceptances  against 
each  other.  It  is  related  that  once  at  the  fair  of  Lyons  eighty  millions  in 
bills  v/erc  paid  and  discharged  against  each  other  without  the  use  of  a  single 
coin. 

THE  INCREASED  GOLD  PRODUCT. 

The  spokesmen  of  the  Silver  party  are  disposed  to  ignore  the  recent 
enormous  increase  in  the  world's  product  of  gold,  and  the  further  fact  that 
in  the  ten  years— 1885-1894 — the  coinage  of  gold  by  the  civilized  nations  of 
the  world  exceeded  the  production  of  gold  by  $305,886,000.  It  is  impossible  to 
say  how  much  of  this  was  the  recoinage  of  abraded  pieces  or  the  conversion  of 
existing  stocks  of  bullion.  The  annual  average  of  gold  production  between 
1885  and  1894,  inclusive,  was  $128,836,400,  while  the  annual  average  of  gold 
coinage  was  $159,435,000.  Of  the  amount  of  gold  employed  in  the  arts,  there 
are  only  estimates,  as,  for  example,  that  for  1894  the  amount  was  $51,250,000, 
of  which  England  used  $12,000,r00  ;  the  United  States,  $10,750,000  ;  France, 
$8,375,000  ;  Switzerland,  $4,175,000,  and  other  countries  in  diminishing  propor- 
tions The  amount  of  gold  held  in  bank  vaults  is  unprecedentedly  large,  and 
the  proportion  of  notes  outstanding  against  it  unprecedentedly  small.  It  was 
for  many  years  regarded  as  a  safe  rule  that  the  great  European  banks  of  issue 
should  maintain  a  cote  circulation  three  times  as  great  as  their  metallic  reserve. 
The  Bank  of  England  has  to  day  a  note  issue  of  $313,000,000,  of  which  $176,- 
000,000  is  retained  by  the  banking  department  in  its  reserve,  but  instead  of 
holding  against  this  issue  gold  to  the  amount  of  $105,000,000,  it  has  the 
enormous  gold  reserve  of  $229,000,000.  In  France  and  Germany  a  similar 
state  of  things  exists,  and  yet  there  are  people  who  still  insist  that  gold  is 
scarce. 

There  began  with  the  second  half  of  the  century  a  period  of  gold  produc- 
tion such  as  the  world  had  never  seen.  The  average  annual  product  of  the 
five  years  1851-55,  was  264.5  per  cent,  above  the  average  of  the  pre- 
ceding ten  years,  and  during  the  following  five  years  this  average  was 
somewhat  exceeded.  There  was  $400,000,000  of  gold  mined  between  1841 
and  1850  and  $1,400,000,000  mined  between  1851  and  1860,  of  which  the 
larger  part  found  its  way  to  the  mints.  Between  1493  and  1840  the  whole 
gold  product  of  the  world  was  $3,800,000,000,  so  that  in  the  twenty  years 
1841-60  nearly  as  much  gold  was  mined  as  in  the  347  years  preceding.  If 
the  comparison  be  carried  to  1870,  it  will  be  found  that  the  annual  product  of 
the  thirty  years — 1841-70— was  nearly  ten  times  as  groat  as  the  annual  average 
of  the  347  years  which  began  with  the  discovery  of  America.  If  there  be  any 
merit  in  what  is  known  as  the  quantity  theory,  prices  ought  to  have  gone  up 
by  leaps  and  bounds  between  1850  and  1870.  But  nothing  of  the  kind  hap- 
pened.   The  price  of  labor  advanced  15  or  20 per  cent.,  as  a  part  of  the  general, 

1,88 


CAN  BE  RAISED    TO    GOLD   VALUE. 


process  that  has  gone  on  without  any  regard  whatever  to  the  world's  stock  of 
precious  metals.  The  articles  that  showed  a  well-marked  rise  in  price  were 
those  whose  production  did  not  increase  in  proportion  to  the  demand,  and 
chiefly  the  growth  of  tropical  countries,  just  as  coffee  and  India  rubber  have 
gone  up  in  price  of  late  years  while  most  other  products  were  going  down. 

The  world's  production  of  gold,  which  fell  off  after  1860,  resumed  its  up- 
ward course  in  1888,  and  has  increased  to  such  an  extent  that  in  the  last  two 
years  the  value  of  gold  extracted  was  greater  than  that  of  both  the  gold  and 
silver  during  the  palmy  days  of  early  Califomian  and  Australian  mining. 
Considering  that  the  amount  of  gold  and  gold  notes  reported  in  actual  circu- 
lation in  the  United  States  at  the  end  of  last  year  was  $528,600,000  against 
$487,700,000  in  silver  dollars,  silver  certificates  and  treasury  notes  of  1890, 
it  would  seem  that  among  the  other  incidents  of  the  triumph  of  the  cause  of 
free  silver  would  be  a  sudden  and  violent  contraction  of  the  currency.  As  the 
purchasing  power  of  every  dollar  would  suffer  an  immediate  and  severe  dimi- 
nution, the  dilemma  presents  itself  to  the  silver  men — would  prices  contract 
with  the  contraction  of  the  currency,  or  would  they  expand  with  the  debase- 
ment of  the  dollar  ?  If  since  the  virtual  stoppage  of  silver  coinage  the  stock 
of  metallic  money  in  the  country  is  not  large  enough  for  the  needs  of  its  com- 
merce, a  frightful  deficit  in  the  circulating  medium  would  surely  be  effected 
by  the  expulsion  of  gold.  The  assumption  that  it  would  not  be  driven  out  is 
too  preposterous  for  argument.  If  the  contention  of  the  silver  men  be  true 
that  it  is  the  gold  in  the  dollar  that  has  depreciated  and  not  the  silver  that  has 
gone  down,  the  fact  remains  that  the  gold  dollar  could  by  no  pc>ssible  exercise 
of  ingenuity  be  made  to  circulate  side  by  side  with  the  silver  dollar. 

But  the  most  serious  charge  against  the  silver  men  is  that  it  is  credit  they 
are  tampering  with  in  their  attempt  to  change  the  standard  of  value.  As  ex- 
Secretary  of  the  Treasury  Hon.  Charles  S.  Fairchild  has  well  said  : 

"All  the  time  we  hear,  and  I  believe  it  is  uncontradicted,  that  about  five 
per  cent,  of  all  the  transactions  of  the  people  of  this  country  are  made  in  money. 
All  the  rest  of  the  transactions  are  made  with  the  other  media — checks,  notes, 
and  all  kinds  of  things.  If  this  is  true,  suppose  we  could  double  the  amount  of 
money  in  an  instant,  what  would  we  have  done  ?  We  would  have  doubled  five 
per  cent,  of  the  whole.  What  would  we  have  added  ?  We  would  have  added 
five  per  cent,  to  the  whole.  In  a  thousand  dollars  what  would  we  have  added  ? 
We  would  have  added  $50.  But  suppose  in  adding  that  $50  you  have  dis- 
turbed the  minds  of  men  so  that  the  other  95  per  cent,  was  diminished,  as  has 
been  done  from  time  to  time  during  the  last  few  years ;  suppose  you  apply 
your  percentage  to  $950,  and  cut  that  in  two,  owing  to  the  uncertainty  you 
have  created  in  the  minds  of  men  as  to  the  quality  of  their  money ;  suppose 
you  have  only  affected  it  by  10  per  cent. — what  is  the  result  ?  Why,  you  have 
(iiminished  that  by  $95,  and  when  you  come  to  add  the  $50  that  you  have 


1.39 


THE  CLAIM  THAT  SILVER  CAN  BE  RAISED  TO  GOLD  VALUE. 

credited  by  doubling  your  money  and  deduct  your  $95,  you  will  find  that  you 
are  $45  worse  off  than  when  you  started.  You  are  4|  per  cent,  worse  off  so 
far  as  the  circulating  medium  that  really  transacts  your  affairs  is  concerned. 
That  is  one  of  the  great  reasons  why  we  find  these  great  disturbances  in  busi- 
ness when  men  tamper  wiih  currency." 


i.so 


A  QUESTION    OF   PUBLIC    FAITH. 


A    QUESTION    OF    PUBLIC    FAITH. 

Up  to  this  time  the  Government  of  the  United  States  has  accepted  the  responsibility  for 
the  mint  t^tamp  on  its  coins  by  keeping  the  legal  and  the  commercial  ratio  of  the  bullion  they 
contained  as  nearly  identical  as  possible,  or  by  pledging  itself  to  the  maintenance  of  parity 
between  them  in  presence  of  a  wide  disparity  between  the  legal  and  commercial  ratio.  The 
free-silver  proposal  does  away  with  any  such  responsibility,  and  places  in  private  hands  the 
regulation  of  the  curiency.  But  in  making  the  depreciated  coinage  a  legal  tender  for  all  debts, 
public  and  private,  it  compels  the  Government  to  adopt  a  policy  of  repudiation.  This  would 
be  a  Btep  attended  by  the  most  disastrous  and  far-reaching  consequences.  It  would  wreck  the 
whole  edifice  of  domestic  credit  as  well  as  aflix  a  lasting  stain  to  the  good  name  of  the  United 
States.  The  disgrace  of  such  a  line  of  public  policy  would  be  fairly  matched  by  the 
monumental  proportions  of  llie  losses  it  would  entail. 

By  opening  the  mints  to  the  free  coinage  of  silver  at  a  ratio  of  16  to  1,  the 
Government  would  at  once  surrender  all  its  power  to  maintain  parity  in  gold 
among  th?  various  elements  of  the  national  currency.  The  real  arbiter  of  the 
value  of  the  dollar  would  be  the  owner  of  silver  bullion  at  home  and  abroad. 
On  the  rapidity  with  which  the  tons  of  silver  offered  for  coinage  could  be 
pa^-sed  through  the  mint,  or  certificates  having  the  quality  of  legal  tender 
could  be  issued  in  exchange  for  the  deposits  of  bullion,  would  mainly  depend 
alike  the  volume  and  the  value  of  the  currency  uuder  the  new  conditions.  The 
bullion  value  in  the  markets  of  the  world  of  371.25  grains  of  pure  silver  would 
be  its  ultimate  standard,  disturbed  at  first  only  by  considerations  due  to  the 
demand  for  currency,  the  amount  of  silver  bullion  offering,  and  the  facilities 
provided  by  law  for  the  prompt  conversion  of  new  or  old  silver  into  some  form 
of  money.  The  Treasury  would  be  compelled  to  accept  this  currency  in  pay- 
ment of  public  dues,  and  would  be  compelled  to  use  it  in  the  payment  of  its 
own  debts.  The  first  tender  of  this  depreciated  currency  to  the  holders  of  the 
bonds  of  the  United  States,  w'ould  be  accepted  by  the  world  as  an  act  of  repu- 
diation. The  faith  of  the  United  States  has  been  held  to  be  pledged  to  the  pay- 
ment of  its  debt,  principal  and  interest  in  gold,  the  country  has  profited  to  the 
extent  of  many  millions  a  year  by  this  interpretation  of  the  Law  of  1869,  and  to 
set  it  aside  now  would  be  a  conspicuous  act  of  public  dishonor,  differing  in 
degree,  not  in  kind,  from  a  formal  act  of  repudiation. 

"PAYABLE  IN  COIN." 

The  advantages  of  redeeming  the  bonds  in  silver  were  first  mooted  twenty 
years  ago  when  the  fall  in  the  price  of  the  white  metal  had  become  considerable 
enough  to  make  the  substitution  appear  a  profitable  operation.  The  subject 
was  then  taken  up  and  discussed  by  Hon.  Lot  M.  Morrill,  Secretary  of  the 
Treasury  in  the  second  administration  of  President  Grant.     In  his  report  of 

1.31 


A   QUESTION   OF   PUBLIC   FAITH. 


December  4,  1876,  Mr.  Morrill  makes  the  following  dispassionate  review  of  the 
considerations  affecting  this  subject  • 

"  Since  the  fall  of  silver,  propositions  for  the  revival  of  the  silver  dollar 
have  been  made,  and  the  position  which  it  would  occupy  with  reference  to 
unexpired  coin  obligations,  should  its  coinage  with  unlimited  tender  be  again 
authorized,  has  been  the  subject  of  considerable  discussion.  The  question 
whether  the  pledged  faith  of  the  United  States  to  pay  its  obligations  in  coin 
would  justify  their  payment  in  the  silver  dollar  is  of  no  small  importance  as 
affecting  the  public  securities  of  the  United  States.  In  any  discussion  of  the 
question  it  must  be  conceded  at  the  outset  that  the  silver  dollar  was  the  unit  of 
value,  having  the  quality  of  legal  tender  for  all  sums  aiid  in  all  cases,  and  that 
the  terms  of  the  United  States  obligations  do  not  exclude  payment  therein,  and 
that  the  Act  of  1869,  in  which  is  the  pledge  of  payment  in  coin,  does  not  in 
terms,  discriminate  against  silver.  These  provisions  are  broad  enough  in  terms, 
to  include  payment  in  either  gold  or  silver,  and  compel  au  inquiry  into  the 
history,  production,  issue,  and  subsequent  treatment  of  these  obligations,  and 
the  relative  condition  of  gold  and  silver  coin  as  money  of  payment  in  order  to 
a  correct  interpretation  of  the  meaning  of  the  language,  '  payment  to  be  made 
in  coin.' 

"  Not  long  after  the  close  of  the  civil  war,  which  gave  rise  to  these  obliga- 
tions, doubts  arose  as  to  the  kind  of  money  in  which  these  securities  were 
payable  and  which  led  to  the  passage  of  the  Act  of  1869,  entitled  '  An  act  to 
strengthen  the  public  credit,'  and  it  was  intended  to  dispel  all  hesitation  or 
doubt  as  to  the  purpose  of  the  Government  upon  the  question,  and  by  which 
the  faith  of  the  United  States  was  pledged  to  the  payment  in  coin  of  all  obliga- 
tions except  those  expressly  otherwise  provided  for.  This  legislative  action 
was  in  harmony  with  that  of  the  executive  administration." 

"  What,  then,  was  intended  and  understood  to  be  intended  by  this  phdge 
of  the  Government  ?  Was  it  that  the  public  securities  were  to  be  paid  in  gold 
coin  or  in  silver,  or  might  be  in  either  ?  " 

'•  It  will  not  be  questioned  by  anyone  conversant  with  the  question  at  that 
time  that  the  popular  impression,  not  to  say  general  conviction,  was  that  the 
pledge  was  for  payment  in  gold.  This  belief  may  have  been  obtained  from  the 
fact  that  the  interest  on  this  class  of  obligations,  payable  in  coin,  had  uniformly 
been  paid  in  gold,  that  the  customs  receipts  had  been  set  apart  to  this  end,  and 
that  those  were  paid  in  gold,  and  that  the  silver  dollar  had,  as  money  of  pay- 
ment, therefore  gone  into  general  disuse,  especially  in  all  large  transactions, 
and  should  scarcely  be  considered  as  contemplated  in  any  measure  having  for 
its  object  to  provide  for  payment  of  sums  so  ample  as  the  interest  on  the  public 
debt,  at  that  time  amounting  to  the  sum  of  $130,000,000.  This  view  of  the 
subject  receives  no  inconsiderable  support,  also,  in  the  legislation  of  Congress  of 
1873,  by  which  the  legal-tender  quality  of  the  silver  coin  was  limited  to  $5. 

1.83 


A    QUESTION   OF   PUBLIC    FAITH. 


By  force  of  the  laws  of  trade,  quite  independent  of  those  of  Congress,  the 
legal-tender  silver  dollar  had  actually  disappeared  from  circulation  as  money, 
and,  although  not  aboUshed  by  act  of  Congress,  it  did  not,  as  matter  of  fact, 
exist  for  commercial  purposes,  and,  did  not  enter  into  money  payments.  The 
object  and  intent  of  the  Act  of  1873  was  confessedly  to  give  to  gold  the  pre- 
cedence in  the  statutes  of  the  country  it  held  in  the  commercial  world  practi- 
cally, and  to  declare  the  gold  dollar  in  law  to  be  what  it  was  in  fact — the 
representative  of  the  money  unit.  Gold  had  for  many  years  been  treated  as 
the  principal  money  of  coin  payments  in  legislation  and  in  the  transactions  of 
the  Treasury  Department:" 

THE  PROFIT  OF   HONEST  KEDEMPTION. 

"  By  the  Act  of  1863  the  Treasury  was  authorized  to  receive  deposits  of 
gold  coin  and  bullion  and  to  issue  certificates  therefor  redeemable  in  gold  coin, 
thus  indicating  that  its  obligations  called  for  payment  in  gold  and  not  in  silver. 
This  provision,  it  will  be  seen,  is  in  consonance  with  the  fact  that  our  foreign 
exchanges  for  many  years  have  been  made  upon  the  gold  basis,  and  thus  it  is 
apparent  that  the  general  understanding  has  been  of  late  years,  for  the  con- 
sideration stated,  that  the  money  of  coin  payments  was  gold,  and  an  obligation 
to  pay  in  coin  required  payment  in  gold  coin." 

*'As  was  contemplated  by  Congress  in  the  policy  declared  in  1869,  the 
public  securities,  then  depressed,  immediately  arose  to  par  in  gold,  and  have 
since  maintained  an  enviable  position  at  the  money  centres  of  the  world.  The 
5.-20  6  per  cent,  bonds,  then  selling  at  88  cents  on  the  dollar,  soon  arose  to  par 
in  gold,  and  have  since  borne  the  average  premium  of  5  per  cent,  at  home  and 
abroad.  At  the  present  time  the  borrowing  power  of  the  Government  is  some- 
what less  than  4^^^  per  cent,  bonds,  on  short  time,  are  really  taken  at  par  in 
gold,  and  sold  at  a  premium  in  this  country  and  in  Europe.  If  no  disturbing 
element  enters  into  our  present  monetary  system,  affecting  the  present  policy 
of  the  Government,  it  is  believed  that  it  will  be  found  practicable  at  no  remote 
period  to  fund  the  national  debt  into  a  4  per  cent,  bond  having  from  thirty  to 
fifty  years  to  run,  and  this  at  an  annual  saving  in  the  interest  of  the  public  debt 
of  $25,800,000,  a  sum  which,  if  invested  in  a  sinking  fund  at  4  per  cent, 
annually  would  pay  off  the  present  national  funded  debt  in  a  fraction  over 
thirty  years." 

"  It  is  a  matter  of  deep  public  concern  that  a  policy  so  beneficent  in  results 
and  advantageous  to  the  future  should  receive  no  detriment  from  conflicting 
interests,  policies  or  theories.  Whatever  may  be  thought  of  the  right  to  pay 
these  public  securities  in  cheaper  money,  it  will  remain  true  that  it  is  lawful 
to  pay  them  in  gold  coin  ;  that  the  belief  that  they  were  to  be  so  paid  has  a 
practicable  value  in  the  probable  reduction  of  the  public  debt  equal  to  one- 
fourth  of  the  amount  of  the  interest  thereon. " 

1.33 


A   QUESTION   OF   PUBLIC   FAITH. 


"  It  is  respectfully  submitted  that  the  coin  payment  to  which  the  faith  of 
the  nation  was  pledged  in  1869  was  gold  and  not  silver,  and  that  any  other 
view  of  it,  whatever  technical  construction  the  language  may  be  susceptible 
of,  would  be  regarded  as  of  doubtful  good,  faith  and  its  probable  effect  preju- 
dicial to  the  public  credit." 

"  THE  CRIME  OF   '73." 

But  it  is  part  of  the  free-silver  contention  that  the  Coinage  Act  of  1873, 
which  made  the  gold  dollar  by  law  what  for  a  generation  it  had  been  in  fact, 
the  unit  of  monetary  value  in  the  United  States,  was  part  of  a  conspiracy  to 
rob  the  American  people  by  compelling  them  to  pay  their  debts  in  a  dollar  of 
greater  value  than  that  in  which  these  debts  were  contracted.  Accordingly, 
the  Coinage  Act  of  1873  is  referred  to  in  free-silver  literature  as  "  the  crime  of 
'73";  it  is  declared  in  the  Chicago  platform  to  have  "  demonetized "  silver 
without  the  knowledge  or  approval  of  the  American  people,  and  to  have 
resulted  in  the  appreciation  of  gold  and  a  corresponding  fall  in  the  prices  of 
commodities  produced  by  the  people.  So  the  question  is  asked  by  those  who 
seek  to  apologize  for  the  act  of  repudiation  proposed  by  giving  a  legal-tender 
quality  to  depreciated  dollars:  "Is  not  a  dollar  that  has  appreciated  in  value 
as  fraudulent  to  the  debtor  as  a  dollar  that  has  depreciated  in  value  is  fraudu- 
lent to  the  creditor  ?  " 

It  is  unquestionably  true  that  the  purchasing  power  of  a  dollar  has  con- 
siderably increased  since  1873.  That  is  part  of  the  progress  of  humanity,  of 
which  we  have  had  our  full  share,  and  by  which  the  laboring  man  has  been 
the  greatest  gainer.  But  the  prices  of  some  things  have  increased,  notably  the 
wages  of  labor,  and  this  would  hardly  be  the  case  if  the  appreciation  of  the 
dollar  were  the  primary  fact  of  the  situation.  And,  as  Secretary  Carlisle  has 
pointed  out,  "  it  is  not  true  that  our  people  owe  any  debts  contracted  as  far 
back  as  1873,  though  it  may  be  that  some  of  our  great  corporations  which  issued 
bonds  before  that  date  still  ow^e  them,  but  they  have  all  been  refunded  at  a 
low  rate  of  interest,  so  that  our  free-coinage  friends  need  not  be  disturbed  on 
their  account."  That  the  demonetization  of  silver  reduced  prices  is  founded 
upon  an  assumption  absolutely  baseless,  for  silver  constituted  no  part  of  the 
money  in  use  or  in  existence  in  this  country  before  or  at  the  time  of  that 
legislation.  As  the  Act  of  1873  did  not  reduce  by  a  dollar  the  amount  of 
money  in  the  country,  it  could  not,  even  accepting  the  theory  of  the  silver 
party,  have  reduced  prices.  As  Secretary  Manning  put  the  case  in  his  report 
for  1885  :  "  Free  coinage  of  a  full-tender  silver  dollar  w^as  all  that  was  with- 
drawn by  the  Act  of  1873  or  changed.  The  right  withdrawn  was  a  right  long 
unused  because  it  was  a  right  unprofitable  to  any  owner  of  silver  in  the  United 
States.  The  unlimited  legal-tender  quality  of  any  silver  dollar  still  existing, 
unmelted,  unexported,  in  the  cabinets  of  collectors  or  the  strong  boxes  of 

1.34 


A  QUES'i^lON  OP  PUBLIC  FAITH. 


hoarders,  whether  the  dollar  of  1792  or  the  dollar  of  1834,  was  not  withdrawn." 
In  his  Covington  speech  of  May,  1895,  Secretary  Carlisle  put  the  question  in  a 
nutshell  when  he  said  :  "  The  only  metallic  or  redemption  money  in  use  here 
at  that  time  was  gold,  which  amounted  to  only  $135,000,000,  including  what 
the  Government  was  using,  whereas  we  now  have  about  $625,000,000  in  gold 
and  $397,652,873  in  full  legal-tender  silver,  beside  about  $77,000,000  in 
subsidiary  silver  coin.  If,  therefore,  prices  have  fallen  since  1873,  the  decline 
has  taken  place  in  spite  of  the  fact  that  our  full  legal-tender  metallic  money 
has  been  ifltreased,  until  now  it  amounts  to  more  than  seven  times  as  much  as 
it  did  at  that  date,  and  consequently  the  alleged  decline  in  prices  must  be 
attributed  to  some  other  cause  than  the  demonetization  of  silver.  These  facts 
prove  not  only  that  the  demonetization  of  silver  did  not  reduce  the  amount  of 
redemption  money  in  this  country,  but  they  prove  also  that  the  fundamental 
proposition  of  the  advocates  of  free  coinage  is  erroneous,  and  that  prices  are 
not  fixed  or  regulated  by  the  amount  of  redemption  money  alone,  for  if  so, 
prices  should  have  increased  since  1873." 

THE   DISPLACEMENT  OP  SILYER. 

The  assertion  that  there  was  anything  furtive,  secret  or  sinister  in  the  Coin- 
age Act  of  1873,  or  in  the  methods  of  its  passage,  is  one  that  frequent  repetition 
does  not  render  less  ridiculous.  No  codification  of  the  mint  laws  had  been 
made  since  1837,  and,  as  part  of  the  preparation  for  the  resumption  of  specie 
payments,  a  complete  revision  of  all  technical  matters  of  assayage  and  coinage 
was  undertaken  in  1870.  An  act  had  been  passed  in  1853  making  the  half 
dollar  and  coins  of  lower  denomination  subsidiary  pieces  with  a  limited  legal, 
tender  quality,  and  placing  their  coinage  entirely  in  the  hands  of  the  Govern- 
ment. Silver  dollars  had  disappeared  from  circulation  because  they  were 
worth  104  cents  of  a  gold  dollar.  But  as  the  smaller  silver  coins  contained 
their  full  proportion  of  silver  bullion,  and  were,  like  the  dollar,  worth  more 
than  their  stamped  value,  the  difficulty  of  keeping  small  change  in  circulation 
became  very  great.  So  the  ratio  was  changed  for  the  smaller  coins,  that  there 
might  be  no  temptation  to  hoard  or  melt  them,  and  the  Government  reserved 
to  itself  the  profit  on  making  them,  that  there  might  be  no  excess  in  the  supply. 

This  was  the  beginning  of  the  end  of  the  free  coinage  of  silver.  As  Mr. 
Dunham,  who  had  the  Act  of  1853  in  charge  in  the  House,  said  :  "  Another 
objection  urged  against  this  proposed  change  is  that  it  gives  us  a  standard  of 
gold  only.  What  advantage  is  to  be  obtained  by  a  standard  of  the  two  metals, 
which  is  as  well,  if  not  much  better,  attained  by  a  single  standard,  I  am  unable 
to  perceive  ;  while  there  are  very  great  disadvantages  resulting  from  it,  as  the 
experience  of  every  nation  which  has'  attempted  to  maintain  it  has  proved. 
Indeed,  it  is  utterly  impossible  that  you  should,  long  at  a  time,  maintain  a 
double  standard.     Gentlemen  talk  about  a  double  standard  of  gold  and  silver 

1.35 


A    QUESTION   OF   PUBLIC   FAITH. 


as  a  thing  that  exists  and  we  propose  to  change.  We  have  had  but  a  single 
standard  for  the  last  three  or  four  years.  That  has  been,  and  now  is,  gold. 
We  propose  to  let  it  remain  so,  and  to  adapt  silver  to  it — to  regulate  it  by  it." 
The  use  of  silver  as  unlimited  legal  tender  equally  with  gold  was  practically 
abandoned  in  1853,  and  a  subsidiary  currency  of  345.6  grains  to  the  dollar's 
worth  was  enacted.  It  was  the  deliberate  purpose  to  complete  in  1870  the 
work  begun  in  1853,  but  so  far  from  there  being  any  secrecy  or  haste  about  it, 
three  years  of  discussion  was  required  to  accomplish  the  task.  The  amend- 
ment to  the  coinage  laws  over  which  there  has  been  so  interminabUHa  mass  of 
misrepresentation  was  described  at  the  time  by  Robert  Patterson,  of  Philadel- 
phia, as  follows:  "The  silver  dollar,  half -dime  and  three-cent  piece  are  dis- 
pensed with  by  this  amendment.  Gold  becomes  the  standard  money,  of  which 
the  gold  dollar  is  the  unit.  Silver  is  subsidiary."  How  little  of  a  novelty  this 
was  deemed  may  be  inferred  from  the  following  remarks  in  the  House  in  April, 
1873,  by  Mr.  W.  L.  Stoughton  :  "  Aside  from  the  three-dollar  gold  piece,  which 
is  a  deviation  from  our  metrical  ratio,  and,  therefore,  objectionable,  the  only 
change  in  the  present  law  is  in  more  clearly  specifying  the  gold  dollar  as  the 
unit  of  value.  This  was  probably  the  intention,  acd  perhaps  the  effect,  of  the 
Act  of  March  3,  1849,  but  it  ought  not  to  be  left  to  inference  or  implication. 
The  value  of  silver  depends,  in  a  great  measure,  upon  the  fluctuations  of  the 
market  and  the  supply  and  demand.  Gold  is  practically  the  standard  of  value 
among  all  civilized  nations,  and  the  time  has  come  in  this  country  when  the 
gold  dollar  should  be  distinctly  declared  to  be  the  coin  representative  of  the 
money  unit."  How  clearly  some  of  the  men  who  afterward  espoused  the 
cause  of  free  silver  understood  the  significance  of  the  proposed  legislation  is 
plain  from  the  following  remarks  made  by  Mr.  W.  D.  Kelley  of  Pennsylvania  : 
"  I  wish  to  ask  the  gentleman  who  has  just  spoken  (Mr.  Potter)  if  he  knows  of 
any  government  in  the  world  which  makes  its  subsidiary  coinage  of  full  valu3  ? 
The  silver  coin  of  England  is  ten  per  cent,  below  the  value  of  gold  coin.  And, 
acting  under  the  advice  of  the  experts  of  this  country  and  of  England  and 
France,  Japan  has  made  her  silver  coinage,  within  the  last  year,  twelve  per 
cent,  below  the  value  of  gold,  and  for  this  reason  :  It  is  impossible  to  retain  the 
double  standard.  The  values  of  gold  and  silver  continually  fluctuate.  You 
cannot  determine  this  year  what  will  be  the  relative  values  of  gold  and  silver 
next  year.  They  were  fifteen  to  one  a  short  time  ago  ;  they  are  sixteen  to  one 
now." 

VERY  DELIBERATE  LEGISLATION. 

If  other  proof  were  needed  that  there  was  nothing  surreptitious  about  the 
passage  of  the  Coinage  Act  of  1873,  the  legislative  history  of  the  bill  ought  to 
furnish  it.  The  date  of  its  introduction  in  the  Senate  was  April  25,  1870  ;  it 
reached  the  House  two  months  later.    It  reappeared  in  both  House  and  Senate 

1.36 


A   QUESTION   OF   PUBLIC   FAITH. 


in  the  winter  session,  but  it  failed  to  pass  as  part  of  the  business  of  that,  the 
Forty- first  Congress.  It  was  reintroduced  in  the  extra  session  of  the  Senate  of 
the  Forty-second  Congress  on  March  9,  1871,  and  after  much  reporting,  recom- 
mitting and  amending,  extending  pretty  well  over  the  whole  term,  it  finally 
became  law  on  February  12, 1873.  The  following  brief  summary  of  the  history 
of  the  act  is  by  Professor  Laughlin  as  are  the  few  lines  of  comment. 

Summary  of  Procedure— The  Act  of  1873. 


SENATE. 

HOUSE. 

Submitted  by  Secretary  of  the  Treasvry 

April  25,  1870 
ApHl  28,  1870 
May     2, 1870 

Referred  to  Senate  Finance  Committee 

Five  hundred  copies  ordered  printed 

Submitted  to  House.,  with  supplementary  report  and  corre- 
spondence     

June   35, 1870 

Reported.,  amended  and  ordered  printed 

Dec.     19,  1870 
Jan.     9, 1871 
Jan.    10,1871 

Debated 

Passed  the  Senate  by  a  rote  o/36  to  14 

Senate  Bill  ordered  printed 

Bill  reported  with  substitute,  and  recommitted 

Original  bill  reintroduced  and  printed 

Jan.    13, 1871 
Feb.    25, 1871 
Mar      9  1871 

Reported  and  debated 

Recommitted   

Jan     10  1872 

Reported  from  Coinage  Committee,  printed  and  recowr 

Feb.      9, 1872 

Reported  back,  amended  and  p7'inted         .... 

Feb      13  1872 

Debated 



May  '  29, 1873 
Dec.     16,1872 
Jan.      7, 1873 
Jan.    17,1873 

Amil    9'  1872 

Amended  and  passed  by  vote  110  to  IS 

May    27,1872 

Printed  in  Senate 

Reported  with  amendments  and  printed 

Reported  with  additional  afnendments  anh printed 

Passed  Senate.             .      .         .... 

Printed  with  amendments 

Jan.    21, 1873 

Jan.    27, 1873 
Feb.      6,  1873 

Jan.    25  1873 

Report  of  conference  committee  presented  and  concurred  in. . 
Became  a  law  February  12,  J8?3                 .... 

Feb.      7, 1873 

It  is  perfectly  clear  from  this  that  there  was  no  haste  nor  secrecy  about  the 
case ;  it  was  printed  again  and  again  ;  laid  on  the  desks  of  members  again 
and  again  ;  it  was  debated  until  144  columns  of  the  "  Globe  "  were  filled.  How, 
then,  can  anyone  of  intelligence  for  a  moment  offer  the  charge  that  the  bill 
was  passed  stealthily  ?  Here  are  the  facts  of  record,  to  be  verified  by  any  man 
in  the  land.  They  are  as  clear  as  day.  In  the  debate  no  opposition  was 
made  whatever  to  the  omission  of  the  silver  dollar  from  the  list  of  coins  per- 
mitted to  be  coined.  The  Senate  occupied  its  time  chiefly  in  debating  affairs 
relating  to  seigniorage  and  abrasion,  while  the  House  was  concerned  with  the 
salaries  of  officials.  Why  was  this  ?  Because  everyone  knew  no  silver  dollar 
pieces  had  been  in  circulation  for  more  .than  twenty-five  years.  That  was  all 
there  was  to  do.  ^ 


1.37 


A   QUESTION   OP   PUBLIC   FAITH. 


THE  "cbime"  op  1806. 

If  a  "  crime"  was  perpretated  against  silver  in  1873,  the  action  of  President 
Jefferson  in  1806  under  which  the  coinage  of  silver  dollars  was  suspended  for 
over  thirty  years  must  have  been  still  more  criminal.  For  here  there  was  no 
appeal  to  Congress,  no  discussion,  no  reporting  or  consideration  of  the  question 
involved,  but  simply  the  following  brief  communication  to  the  Director  of  the 
Mint  at  Philadelphia  from  Jefferson's  Secretary  of  State  : 

"  Department  op  State,  May  1,  1806. 
**  Sir — In  consequence  of  a  representation  from  the  Director  of  the  Bank  of 
the  United  States  that  considerable  purchases  have  been  made  of  silver  dollars 
coined  at  the  mint  for  the  purposes  of  exporting  them,  and  as  it  is  probable 
further  purchases  and  exporlations  will  be  made,  the  President  directs  that  all 
the  silver  to  be  coined  at  the  mint  shall  be  of  small  denominations,  so  that  the 
value  of  the  largest  piece  shall  not  exceed  half  a  dollar. 
*'  I  am,  etc., 

*'  James  Madison. 
"  Robert  Patterson,  Esq., 

Virector  of  the  Mini." 

To  urge  so  purely  fanciful  a  public  wrong  as  the  so-called  "  Crime  of  73" 
as  justification  for  a  comprehensive  act  of  national  repudiation  is  of  a  piece 
with  the  whole  process  of  mental  and  moral  distortion  that  underlies  the  free 
silver  proposal.  The  national  shame  of  it  would  be  equaled  only  by  the  heri- 
tage of  national  disaster.  As  Pierre  des  Essars  says  of  Portugal :  "  There  is  a 
treacherous  enemy  who  lays  pitfalls  for  the  prodigal  and  the  defaulter  among 
governments ;  this  enemy  is  called  exchange,  which  is  the  dial  of  national  de- 
cline of  credit.  This  exchange  impoverishes  day  by  day  whoever  receives  a 
bank  note  ;  it  makes  money  melt  like  snow,  and  like  snow  it  trickles  from  his 
hands.  Tiie  country  is  placed  on  every  side,  at  the  mercy  of  a  discredit  which 
keeps  increasingly  turning  the  exchanges  against  it."  On  certain  classes  of 
imports  it  has  the  effect  of  a  prohibitory  tariff,  and  only  to  those  who  believe 
in  the  Chinese-wall  policy  of  commercial  isolation,  does  it  have  anything  to  be 
commended.  But  it  falls  like  a  blight  on  all  progress  and  tends  to  aggravate 
all  the  evils  of  industrial  monopoly  which  the  silver  advocates  take  occasion  to 
deplore. 

the  cost  op  dishonor. 

Consider  more  minutely,  in  the  line  indicated  by  Mr.  W.  L.  Trenholm,  the 
effect  of  discrediting  the  Government  of  the  United  States.  Let  the  Govern- 
ment lose  its  credit  with  the  bankers,  can  it  be  retained  among  the  people  ? 
Surely  not.  The  $100,000,000  of  goUnow  held  as  a  special  redemption  fund 
will  be  drawn  out  as  fast  as  greenbacks  can  be  handed  in  through  every  aper- 


A   QUESTION   OP   PUBLIC    FAITH. 


tare  of  the  redemption  counters  of  the  Treasury,  and  there  will  remain  $246,- 
000,000  of  greenbacks  in  the  hands  of  the  people,  and  neither  gold  to  redeem 
them  with  nor  credit  with  which  to  get  more  gold.  These  will,  of  course,  im- 
mediately depreciate,  how  much  is  immaterial  to  our  immediate  purpose  ;  let 
us  say,  only  10  per  cent.  That  will  take  10  per  cent,  off  the  purchasing  power 
of  $380,000,000  of  silver  dollars,  $246,000,000  of  greenbacks,  $150,000,000  of 
Treasury  notes  of  1890,  about  $200,000,000  of  national  bank  notes  (because 
they  are  redeemable  in  greenbacks),  making  $976,000,000  of  currency,  on 
which  10  per  cent,  is  $97,600,000. 

.  In  the  last  report  of  the  Comptroller  of  the  Currency,  deposits  of  all  the 
State  banks  and  trust  companies  are  estimated  at  $1,129,000,000  ;  savings  bank 
deposits,  $1,778,000,000;  individual  deposits  in  national  banks,  $1,728,000,- 
000  ;  private  bankers'  deposits,  $66,000,000.  The  total  debt  of  the  banks,  etc., 
to  the  people,  payable  in  lawful  money,  is  thus  $4,701,000,000.  These  deposits 
would,  of  course,  follow  the  value  of  lawful  money  in  which  they  are  payable. 
On  the  $4,701,000,000  of  deposits  above  shown,  the  loss  would  be  $470,100, 
000  ;  and  the  loss  on  currency  as  above  would  be  $97,600,000  ,  aggregate  loss 
on  above  items  resulting  from  10  per  cent,  depreciation  of  greenbacks,  $567,- 
700,000.  Here,  then,  is  the  sword  held  over  us.  Here  is  the  power  that  com- 
pels us  to  preserve  the  credit  of  our  Government. 

Our  circulation  now  includes  :  Greenbacks,  about  $346,000,000  ;  national 
pank  notes,  $212,000,000 ;  silver  dollars  and  silver  coin  certificates  out- 
standing, say  $490,000,000;  making  the  total  of  paper  and  silver  and  coin 
held  up  to  parity  of  value  with  gold  by  the  credit  of  the  Government, 
$1,048,000,000. 

^  The  entire  value  of  the  greenbacks  and  national  bank  notes  depends  upon 
credit,  while  the  silver  dollars  and  silver  certificates  derive  more  than  a  fourth 
of  their  value  from  credit.  Impair  that  credit,  and  for  every  1  per  cent,  of 
currency  depreciation  resulting  from  its  impairment  you  will  inflict  upon  the 
people  who  are  holding  the  currency,  a  loss  of  $10,480,000  ;  and  upon  depos- 
itors in  banks,  etc.,  $47,010,000  ;  here  is  a  loss,  for  every  1  per  cent,  deprecia- 
tion of  $57,440,000.  If  the  currency  drops  to  the  intrinsic  value  of  412^^ 
grains  of  silver  to  the  dollar,  now  less  than  53  cents,  that  will  be  a  loss  of  over 
47  per  cent.,  or  nearly  $2,700,000,000,  which  is  more  than  three  times  the  en 
tire  volume  of  the  national  bonded  debt  still  unpaid. 

Let  Congress  say,  now,  that  the  standard  is  the  silver  dollar,  and  straight- 
way a  loss  of  $2,210,000,000  will  fall  upon  those  among  the  people  of  the 
United  States  who  have  no  gold,  no  foreign  exchange,  no  government  bonds, 
no  bank  stock.  The  people,  the  masses,  who  have  deposits  in  the  various 
banks,  and  who  hold  the  money  provided  by  the  Government,  will  have  to 
bear  the  entire  loss.  What  boots  it  that  a  large  part  of  this  fearful  loss  will 
be  offset  by  gains  to  those  (banks  and  bankers)  who  now  owe  this  money,  and 

1,39 


A   QUESTION   OF   PUBLIC   FAITH. 


who  have  been  wise  enough  or  fortunate  enough  to  invest  it  abroad,  or  to 
hold  it  here  in  gold,  or  in  securities  convertible  into  gold  ?  In  the  case  sup- 
posed, the  poor  will  all  be  made  poorer,  the  great  bulk  of  the  people  who  are 
in  moderate  circumstances  will  bear  the  chief  loss,  while  some  few  among  the 
rich  may  possibly  be  made  richer.  If  these  things  are  clearly  apprehended, 
either  in  Congress  or  among  the  people,  will  any  voice  be  raised  to  disturb 
the  public  confidence  now  enjoyed  by  our  money  ?  No  patriot,  no  statesman 
could  wish  to  disturb  it ;  no  demagogue  or  fanatic  would  dare  to  do  so. 

TO   IMPAIR  THE   OBLIGATION   OF   CONTRACTS. 

But  the  silver  party  does  not  propose  to  stop  short  at  reducing  the  Grovern- 
ment  to  the  necessity  of  paying  its  debts  in  depreciated  money  ;  its  platform 
declares  for  "  such  legislation  as  will  prevent  for  the  future  the  demonetiza- 
tion of  any  kind  of  legal-tender  money  by  private  contract."  This  is  to  say, 
it  proposes  to  do  its  best  to  make  unlawful  all  promises  between  individuals  to 
pay  in  gold.  If,  however,  there  is  to  be  a  daily  uncertainty,  as  there  would 
inevitably  be  under  the  free  coinage  of  silver,  about  the  value  of  the  monetary 
unit,  it  would  obviously  be  very  hard  to  adjust  the  terms  of  contracts  to  pay 
or  receive  money  at  a  future  time.  The  very  existence  of  credit  is  dependent 
upon  the  certainty  of  the  monetary  unit,  and  if  the  Government  failed  to 
supply  that  certainty  the  people  would  have  to  make  shift  to  do  it  for  them- 
selves, otherwise  industry  would  be  paralyzed  and  commerce  reduced  to  a 
particularly  risky  form  of  gambling. 

But,  in  this  case,  it  is  proposed  not  only  that  the  Government  shall  commit 
itself  to  a  shifting  standard  of  value,  but  shall  prevent  any  body  of  citizens 
or  any  State  from  adopting  a  stable  one.  This  is  an  undertaking  which 
would  obviously  transcend  the  power  of  Congress.  The  silver  party  ap- 
parently adopt  the  novel  reading  of  the  Constitution  that  there  was  reserved 
to  Congress  the  power  to  pass  any  law  impairing  the  obligation  of  contracts, 
because  it  was  expressly  forbidden  to  any  State.  If  the  enumeration  in  the 
Constitution  of  certain  rights  is  not  to  be  construed  to  deny  or  disparage 
others  retained  by  the  people,  surely  the  fact  that  the  sacredness  of  contracts 
is  specially  guaranteed  against  State  violation  is  proof  that  Congress  was 
expected  to  hold  it  in  very  strict  regard.  It  would  obviously  require  a  special 
delegation  of  power  to  warrant  any  interference  by  Congress  with  one  of  the 
primary  rights  of  the  people,  and  it  involves  nothing  short  of  a  contradiction 
in  terms  to  assume  that  in  the  fundamental  law  of  this  Republic  any  such 
delegation  could  have  been  expressed  or  implied. 

It  is  not  at  all  doubtful  what  view  the  Supreme  Court  would  take  of  such 
a  question,  and  here  would  probably  come  one  of  the  very  first  shocks  of  the 
inevitable  conflict  between  the  Federal  Judiciary  and  the  Executive  branches 
of  a  government  founded  on  the  Chicago  platform.     The  former   would 

1.40 


A  QUESTION   OF   PUBLIC   FAITH. 


remain,  under  such  a  government,  the  sole  guardian  of  the  public  rights,  the 
sole  custodian  of  the  national  honor.  But  it  would  have  no  power  to  enforce 
its  own  decrees,  no  power  even  to  preserve  its  own  ranks  against  the  intrusion 
of  men  deliberately  selected  to  overthrow  the  whole  fabric  of  its  antecedent 
decisions.  There  can  be  no  doubt  as  to  the  meaning  of  the  allusion  in  the 
Chicago  platform  to  the  Court  as  it  may  "  hereafter  be  constituted,"  Nor  can 
there  be  any  doubt  that  the  keystone  of  the  arch  of  Eepablican  freedom  will 
be  removed  when  the  tribunal  that  was  created  to  protect  the  Constitution 
against  legislative  encroachment  becomes  so  perverted  in  membership  and  in 
purpose  as  to  be  itself  a  menace  to  the  integrity  of  the  Constitution  and  a 
means  of  facilitating  the  betrayal  of  its  guaranties. 


1.41 


THE   FARMER  AND   FREE  SILVER. 

The  farmer  Is  asked  to  believe  that  free  silver  means  for  him  better  prices  and  a  lighter 
burden  of  debt.  The  prices  would  advance  only  in  name  and  the  present  debt  be  scaled  down 
only  to  have  the  loss  made  good  in  future  loans.  The  farmer  sells  the  great  bulk  of  his  crops  in 
the  home  market,  and  anything  that  brings  disaster  to  the  country  at  large  must  be  adverse  to 
his  interests.  Like  other  men  engaged  in  productive  occupations,  farmers  have  a  constant 
necessity  to  borrow  money,  and  they  are  as  much  interested  as  merchants  and  manufacturers 
are  in  averting  a  collapse  of  the  whole  fabric  of  credit.  Farmers  are  also  capitalists  and 
creditors,  they  own  the  largest  single  aggregate  of  property  in  the  country,  they  have  accu- 
mulated savings,  and  they  are  lenders  as  well  as  borrowers.  In  any  of  these  capacities,  the 
farmer  has  nothing  to  gain,  but  everything  to  lose,  by  the  demoralization  attending  the  adop- 
tion of  a  debased  currency  system. 

The  idea  that  the  farmer  would  be  any  better  off  by  a  resort  to  the  free 
coinage  of  silver  at  a  ratio  of  16  to  1  rests  upon  two  assumptions,  both  of  which 
are  demonstrably  false.  The  first  is  that  the  prices  of  agricultural  products 
have  declined  because  of  the  fall  in  the  price  of  silver,  and  the  other  is  that 
with  all  values  measured  by  silver,  the  farmer  would  not  only  get  more 
money  for  his  product,  but  that  the  new  silver  dollar  would  be  quite  as  good 
for  the  purchase  of  things  that  he  needs  as  the  gold  dollar. 

In  an  inquiry  relating  to  the  greatest  industry  in  the  country,  it  is  neces- 
sary to  separate  it  into  its  component  elements.  The  conditions  that  affect 
the  sale  of  wheat  and  cotton,  for  example,  are  not  the  same  as  those  which 
govern  the  prices  of  corn  and  hay.  But  if  the  prices  of  the  whole  range  of 
the  produce  of  American  farms  have  been  depressed  by  the  fall  in  the  price 
of  silver,  there  must  have  been  substantial  uniformity  in  the  process.  In 
point  of  fact  there  has  been  no  such  thing.  Some  agricultural  products  are 
higher  than  they  were  before  silver  began  to  decline,  and  others  are  lower. 
The  two  which  are  notably  lower  are  wheat  ana  cotton.  The  cause  of  the 
fall  in  price  of  the  former  is  simply  the  increase  of  the  world's  production 
beyond  the  demands  of  consumption.  The  competition  with  American  wheat 
in  Europe  of  Russia,  India,  Australia  and  Argentina— the  exports  from  these 
countries  increasing  by  439,000,000  bushels  in  six  years — is  surely  a  sufficient 
explanation  of  the  fall  in  the  price  of  wheat,  as  the  trebling  in  twenty  years  of 
the  yield  of  cotton,  readily  accounts  for  its  fall  in  price. 

CHEAP  MONEY  AND  INCKEASED  EXPORTS. 

But  the  silver  men  argue  that  we  are  at  a  disadvantage  in  competing  with 
Russia  and  Argentina,  because  with  a  cheaper  currency  they  can  undersell  us. 
In  the  same  way,  the  French  farmers  were  told  by  the  bimetallist  agitators 
that  they  were  suffering  from  the  low  price  of  wheat  made  by  the  competition 
of  India.  It  was  declared  that  since  the  same  quantity  of  gold  will  buy  twice 
as  many  rupees  as  it  did  twenty  years  ago,  it  will  also  buy  twice  as  much 

1.43 


THE   FARMER   AND    FREE    SILVER. 


Indian  wheat,  so  that  an  enormous  stimulus  is  given  to  the  export  trade,  of 
which  the  people  of  India  have  the  full  benefit,  because  the  purchasing  power 
of  the  rupee  remains  unchanged.  When  it  is  revamped  for  use  here,  the  propo- 
sition appears  in  some  such  form  as  this  :  The  pound  sterling  is  only  worth  $5 
in  America,  whereas  in  purchasing  power  it  is  worth  nearly  $10  in  India  and 
the  Argentine  Eepublic,  and  the  English  merchant  will  not  and  can  not  pay 
$10  for  merchandise  in  this  country,  when  by  reason  of  the  difference  of 
exchange,  he  could  buy  the  same  quantity  for  a  little  over  $5  in  South  Amejica 
and  India. 

The  answer  to  statements  like  these  is,  simply,  that  they  are  not  true. 
When  they  were  doing  duty  in  France,  an  economist  of  an  inquiring  turn  of 
mind  undertook  to  subject  them  to  a  practical  test.  He  asked  one  of  the  great 
importing  houses  of  London  to  find  out  for  him  what  was  the  price  of  wheat 
jn  gold  the  second  week  of  January  at  the  chief  shipping  port  of  Argentina, 
Russia,  the  United  States,  and  British  India.  Wheat  is  sold  in  France  by 
the  metric  quintal,  a  measure  of  a  little  over  220  pounds,  or  say  S%  bushels. 
This  was,  accordingly,  the  unit  of  comparison.  He  found  that  at  Buenos 
Ay  res  the  nominal  price  of  the  quintal  was  30fr.75  in  paper,  which  was  then 
equal  to  lOfr.lO  in  gold.  At  Odessa  "poods"  enough  of  wheat  to  make  a 
quintal  could  be  bought  for  19  fr.04  in  paper  roubles,  worth  12  fr.73  in  gold. 
In  New  York  the  price  of  the  bushel  was  69  cents,  which  made  the  quintal 
worth  $2.53  or  13  fr.  10,  from  which  was  deducted  9  centimes,  on  account  of  a 
premium  of  exchange  of  %ths  of  one  per  cent  on  gold.  At  Bombay  a  "candy  " 
of  wheat  cost  32  rupees,  making  the  price  per  quintal  9  rupees  or  21  fr.  42  at  par 
of  the  rupee.  But  the  rupee  being  worth  on  January  14th  only  14-^^  pence 
instead  of  24  pence  or  Ifr.  50  instead  of  2  f r,  38,  the  true  price  of  the  quintal, 
or  the  price  paid  for  it  in  gold,  resolved  itself  into  13fr.  50. 

Here,  then,  in  four  of  the  world's  markets  for  wheat  separated  by  thousands 
of  miles  from  each  other,  it  required  last  January  to  buy  3^5  bushels  the  fol- 
lowing sums  in  gold  :  $2.02,  $2.55,  $2.60  and  $2.70  respectively.  The  lowest 
price  was  in  a  country  where  the  paper  currency  is  worth  rather  less  than  a 
third  of  its  face  value,  and  the  highest  in  a  country  nominally  on  a  silver 
basis,  but  really  under  a  regime  of  suspended  free  coinage  of  silver  as  the  pre- 
liminar}'-  to  the  establishment  of  a  gold  standard.  Instead  of  the  pound  ster- 
ling being  worth  twice  as  much  in  Bombay  as  in  New  York,  it  is,  obviously, 
worth  a  fraction  less,  and  so  far  from  the  American  farmer  having  to  fear  the 
competition  of  the  Indian  ryot,  it  would  seem  that  the  latter  has,  so  far,  rather 
the  worst  of  the  game.  That  is,  if  the  presentation  of  his  product  at  a  price 
calculated  to  tempt  purchasers  be  deemed  an  advantage,  the  American  has  it 
over  the  farmer  in  India,  while  the  farmers  in  Russia  and  the  Argentine  have  it 
over  him.  Apparently,  the  Populist  argument  requires  that  the  country  should 
get  back  with  all  possible  dispatch  to  a  currency  of  irredeemable  paper,, 

1.48 


THE   FARMER   AND   FREE   SILVER. 


FARM  PRICES   AND  FOREIGN  PRICES. 

Tested  by  its  price  at  the  centre  of  production  the  fall  in  the  price  of  wheat 
has  a  much  narrower  range  than  when  tested  by  the  foreign  quotations.  But 
even  tested  by  the  standard  value  for  the  world,  set  for  wheat  by  the  price  of 
an  imperial  quarter  of  grain  at  Mark  Lane,  London,  it  will  be  found  that  the 
decline  of  wheat  began  in  1855,  nearly  twenty  years  before  silver  was  "  demone- 
tized." In  1855  the  average  price  for  the  year  was  74s.  9d.  The  average  price 
for  the  year  1894  for  an  imperial  quarter  of  wheat  was  22s.  lOd. ;  that  is,  hardly 
more  than  30  per  cent,  what  it  had  been  in  1855.  But  in  1870,  one  year  before 
Germany  and  three  years  before  the  United  States  had  ruled  silver  out  of  their 
coinage  as  full  legal  tender,  the  price  of  wheat  had  tumbled  to  46s.  lid.  per 
quarter  ;  that  is,  it  had  dropped  nearly  half  of  the  value  it  had  in  1855,  before 
the  question  of  silver  came  up  as  a  factor  of  any  practical  or  theoretical  impor- 
tance. There  were  fluctuations  in  price  from  1855  to  1870,  just  as  there  have 
been  fluctuations  in  price  between  1870  and  1895,  ups  and  downs,  controlled  by 
good  and  bad  harvests ;  but  on  the  whole  the  tendency  of  values  had  been 
downhill  at  an  even  more  rapid  rate  in  the  fifteen  years  between  1855  and  1870 
than  in  the  twenty-five  years  between  1870  and  1895.  Coming  to  the  centre 
of  production  in  the  Mississippi  valley,  it  w^ould  appear  that  gold  has  depre- 
ciated there  since  1860,  because  the  prices  of  wheat  in  Minnesota  from  1862  to 
1866  averaged  56.5  cents  a  bushel,  if  the  currency  price  of  a  part  of  that  period 
be  reduced  to  a  gold  basis.  In  1891  to  1894  the  average  was  62  cents.  The 
following  extract  from  a  report  made  by  Mr.  L.  G.  Powers,  Chief  of  the  Bureau 
of  Statistics  of  Minnesota,  brings  out  this  point  very  clearly,  as  also  the  still 
more  important  point,  that  by  far' the  largest  part  of  the  decline  in  the  London 
quotations  for  wheat  has  been  brought  about  by  economies  in  transportation 
and  in  intermediate  charges. 

"  A  comparative  statement  of  the  average  gold  values  for  wheat  per  bushel 
upon  the  farms  of  Minnesota  and  New  York,  and  the  market  value  in  cents  of 
American  wheat  in  London,  England,  from  1862  to  1894  : 


Minn. 

New  York. 

London. 

DlPrBRBNCES. 

Year. 

Minn. and 
New  York. 

Minn,  and 
London. 

1862-66 

56.5 
65.3 
73.1 
72.7 
92.2 
64.2 
73.4 
62.1 

115.0 
138.6 
134.1 
110.5 
132.4 
92.4 
95.3 
83.5 

175.6 
176.3 
149.2 
149  6 
113.5 
106.1 

58.5 
73.3 
61.1 
37.8 
40.2 
38.2 
21.9 
21.4 

1867-70 

110.3 
103.2 
76.5 
57  4 

1871-74 

1875-78 

1879-8^... 

1883-86...   . 

48  3 

1887-90 

38.7 

1891-94 

1.44 


THE    FARMER   AND    FREE    SILVER. 


"An  examination  of  the  foregoing  table  shows  that  from  1867  to  1870  the 
Minnesota  farmer,  on  an  average,  realized  in  gold  only  a  trifle  over  one-third 
of  what  his  wheat  was  quoted  at  in  London.  He  received  65.3  cents  a  bushel, 
while  110.3  cents  were  absorbed  by  the  middlemen,  the  dealers  and  transpor- 
tation companies,  between  him  and  the  London  miller,  who  paid  for  the  wheat 
175.6  cents.  This  great  difference  between  the  Minnesota  figures  for  wheat 
and  those  of  London  has  steadily  declined,  and  this  decline  measures  the  fall 
of  grain  prices  in  Europe." 

"  The  Minnesota  wheat  farmer  realizes  a  general  advance  in  the  prices 
obtained  by  him  from  1867  to  1883,  and  thereafter  a  decline.  Some  of  the 
advance  between  1867  and  1882  arose  from  the  introduction  of  the  roller  pro- 
cess in  milling  in  Minneapolis,  which  raised  the  price  of  hard  spring  wheat 
from  a  level  of  10  cents  a  bushel  below  to  10  cents  a  bushel  above  the  best 
white  winter  wheat  of  New  York.  The  fact  that  other,  and  more  recent, 
milling  inventions  have  raised  the  price  of  winter  wheat  to  nearly  the  same  as 
that  of  hard  spring,  accounts  for  some  of  the  subsequent  decline  shown  in 
the  table  for  Minnesota." 

"  The  average  price  of  wheat  advanced  in  Minnesota  after  the  legislation 
of  1873  as  well  as  declined.  The  silver  legislation  could  not  produce  both. 
The  great  decline  in  the  average  prices  in  the  Eastern  States  took  place  between 
1862  and  1873,  and  not  after.  The  silver  legislation  of  1873  cannot  be  said  to 
have  caused  the  decline  in  grain  prices." 

THE   INFLUENCE  AFFECTING  COTTON. 

The  special  reasons  affecting  the  price  of  cotton  are  equally  unmistakable. 
As  Professor  Laughlin  remarks  :  Silver  had  no  more  to  do  with  the  fall  of 
the  price  of  cotton  than  it  had  to  do  with  the  fall  of  Icarus  when  the  wax  on 
his  wings  gave  out.  From  1876  to  1878  cotton  sold  at  about  11  cents  per 
pound  ;  and  in  1890  it  sold  at  the  same  price.  It  is  only  in  the  last  five  years, 
1891-1895,  that  exceptionally  low  prices  prevailed.  The  explanation  of  these 
low  prices  is  to  be  found  in  the  fact  that  the  consumption  has  not  kept  pace 
with  the  steadily  increasing  production  of  cotton  in  the  United  States.  The 
crop  of  to-day  is  about  triple  that  of  1872,  Still,  up  to  1890  increasing  con- 
sumption kept  up  fairly  well  with  the  increasing  production.  The  depression 
of  trade  in  1890,  following  the  Baring  failure,  reduced  the  consumption  of 
cotton,  but  just  at  this  time  came  two  or  the  largest  crops  of  cotton  ever  pro- 
duced. At  the  very  time  when  the  demand  fell  off  the  supply  of  cotton 
enormously  increased.  In  1891  the  cotton  crop  rose  to  8,652,597  bales,  fol- 
lowed in  1892  by  a  still  larger  crop  of  9,035,379  bales.  Cotton  fell  in  price 
from  12f  cents  in  May,  1890,  to  6|  cents  in  March,  1892,  The  low  prices 
led  to  a  reduction  of  the  acreage  planted  in  cotton,  and  in  1893  the  crop  fell  to 
6,700,365  bales.     Thereupon  prices  improved  shghtly.    But  the  prospect  of  a 

1.45 


THE   FARMER   AND    FREE   SILVER. 

crop  of  9,375,000  bales  in  1895,  beyond  the  demand  for  consumption,  again  de- 
pressed prices.  Just  £0  soon  as  the  coming  recovery  from  the  crisis  of  1893  al- 
lows a  readjustment  of  consumption  to  supply,  the  price  of  cotton  will  rise  to  a 
point  at  which  the  production  of  cotton  will  again  be  profitable.  And  then,  if 
not  before,  it  will  be  seen  how  absurd  it  has  been  to  connect  the  price  of  cotton 
with  the  "  demonetization  "  of  silver,  or  any  such  thing.  It  is  arrant  dema- 
goguism  to  try  to  make  cotton  growers  believe  that  free  coinage  of  silver  can  in 
any  way  restore  the  price  of  cotton,  when  its  fall  is  due  to  excessive  crops. 
This  may  be  seen  in  the  following  table. 

Annual  Crop  of  Cotton       Year's  Price,  N.  Y., 
Year.  in  Bales.  in  Cents, 

1873 2,974,351  22.19 

1873 3,930,508  20.14 

1874 4,170,388  17.95 

1875 3,827,845  15.46 

1876 4,632,313  12.98 

1877 4,474,069  11.82 

1878 4,773,865  11.22 

1879 5,074,155  10.84 

1880 5,761,252  11.51 

1881 6,605,750  12.03 

1882 5,456,048  11.56 

1883 ...  6,949,756  11.88 

1884 5,513,200  10.88 

1885 5,706,165  10.45 

1886 6,575,691  9.28 

1887 6,505,087  10.21 

1888 7,046, 833  10.03 

1889 6,938.290  10.65 

1890 7,311,322  11.07 

1891 8,652,597  8.60 

1892 9,035,379  7.71 

1893 6,700,365  8.56 

1894 7,549,817  6.91- 

1895 9,901,251  7, 44 

PUECHASING  POWER  OF  A  BUSHEL   OF   WHEAT. 

Professor  Laughlin  has  made  an  interesting  study  of  the  purchasing 
power  of  a  bushel  of  wheat  and  he  finds  that  even  though  wheat  has  fallen  in 
price,  it  will  buy  as  much  and  even  more  than  ever.  A  less  number  of  bushels 
of  wheat  would  buy  the  agricultural  implements  of  the  farmer  in  1889  than  in 
1873,  because  there  bad  been  such  a  marked  reduction  in  the  cost  of  manufac 
turipg  th§s§  impleiiieuts,    Foreign  competition  imy  have  reduced  the  Liver- 

1.40 


THE   FARMER   AND   FREE   SILVER. 


pool  price  of  wheat,  but  the  implements  to  he  bought  by  the  farmer  have  fallen 
still  more.  This  is  so  important  a  point  that  it  should  be  reiterated  and  re- 
peated; for  it  has  been  taken  for  granted  that  the  fall  in  the  price  of  wheat 
means  an  absolute  loss  to  the  farmer,  when,  in  fact,  other  things  have  fallen 
as  well,  and  in  greater  proportion.  Examine,  then,  the  number  of  bushels  of 
wheat,  corn  or  oats  required  to  buy  the  following  implements  of  general  use 
on  a  farm  in  1873  and  in  1889  : 


Implements. 


One-horse  steel  plow  (wood  beam) 

One-horse  iron  plow  (wood  beam) 

Two-horse  side-hill,  or  reversible  plow 

One  potato  digger  

Old-fashioned  tooth  harrow 

One-horse  cultivator 

One-horse  mower 

Com.  iron  garden  rake  (lO-tooth  steel), doz, 

One-horse  horse-power 

Binder 

Com-sheller  (1  hole) 

Common  hoes  (cast-steel  socket),  per  doz. , 

Common  rakes  (wood),  per  doz 

Scythes  (Ames'  grass),  per  doz 

Scythe  snaths  (patent),  per  doz 

Shovel  (Ames),  per  doz 

Spades  (Ames),  per  doz 

Total 


Bush.  Wheat. 

Bush.  Corn. 

Bush. 

Oats. 

1873. 

1889. 

1873. 

1889. 

1873.  . 

1889. 

6.4 

3.8 

19.1 

8.5 

27.0 

11.5 

4.9 

2.7 

14.7 

6.2 

20.8 

8.3 

17.6 

13.7 

52.9 

31.2 

75.0 

41.7 

19.6 

10.2 

58.8 

23.4 

83.3 

31.2 

14.7 

8.9 

44.1 

20.3 

62.5 

27.0 

6.8 

4.7 

20.5 

10.9 

29.1 

14.5 

83.3 

61.6 

250.0 

140.6 

3.54.1 

187.5 

11.7 

5.1 

35.2 

11.7 

50.0 

15.6 

44.1 

34.2 

13-2.3 

78.1 

187.5 

104.1 

277.7 

184.9 

769.2 

421.8 

857.1 

562.5 

11.2 

8.2 

33.8 

18.7 

47.9 

25.0 

6.3 

4.7 

19.1 

10.9 

27.0 

14.5 

2.9 

2.4 

8.8 

6.2 

12.5 

8.3 

15.7 

10.2 

47.0 

23.4 

66.6 

31.2 

10.8 

6.1 

32.3 

14.0 

45.8 

18.7 

17.6 

13  0 

52.9 

29.6 

75.0 

39.5 

18.1 

13.7 

54.4 

31.2 

27.0 

46.6 

589.4 

388.1 

1,645.1 

886.7 

2,048.2 

1,187  7 

The  figures  indicate  the  number  of  bushels  it  took  in  1873  and  1889,  respec- 
tively, to  buy  the  implements  opposite  to  which  they  are  placed.  For  instance 
while  it  was  necessary  for  a  farmer  to  sell  83.3  bushels  of  wheat  in  1873  to  buy 
a  one-horse  mower,  it  required  only  61.6  bushels  in  1889  to  purchase  the  same 
implement.  That  is,  although  wheat  fell  in  price,  mowers  fell  still  more  because 
of  the  cheapening  in  the  cost  of  manufacture.  Notice  the  final  lesson  as  con- 
cerns wheat  alone,  even  though  it  has  fallen  in  price  from  99.4  cents  in  1873  to 
69.8  cents  in  1889,  In  1873  all  those  seventeen  kinds  of  implements  would 
require 569.4  bushels  of  wheat  to  buy  them,  and  after  "the  crime  of  1873 "  it 
took  only  388.1  bushels  to  buy  the  same  articles.  When  the  purchasing 
power  of  a  bushel  of  the  several  crops  is  reckoned  in  other  articles  purchased 
by  the  farmer,  the  same  story  is  told,  as  the  tables  of  prices  show.  If  there 
were  any  sense  at  all  in  this  talk  about  "demonetization"  in  1873,  we  might 
beg  for  more  of  it  for  the  farmer. 

FACTS  ABOUT  CORN  AND  OTHER  CROPS. 

If  the  comparison  is  made  between  implements  and  other  cereal  crops,  the 
gain  of  the  farmer  since  1873  is  still  more  marked.     Whatever  illusions  for- 

1.47 


THE   FARMER   AND   FREE   SILVER. 


eigners  may  have  on  this  subject,  it  need  hardly  be  remarked  here  that  wheat 
is  not  the  most  important  crop  in  this  country,  and  that  it  is  in  some  sections 
rather  an  optional  or  alternative  crop  with  the  more  important  products  of 
Indian  corn,  oats  or  haj.  Mr.  L.  G.  Powers,  of  Minnesota,  has  compiled  a 
very  interesting  table  which  at  once  illustrates  this  point  and  shows  the  abso- 
lute absence  of  any  relation  between  the  price  of  silver  and  that  of  the  great 
agricultural  staples  of  the  country.  Dealing  with  the  farm  values  of  nine 
crops — corn,  oats,  wheat,  rye,  barley,  buckwheat,  potatoes,  hay  and  tobacco— 
of  the  State  of  Illinois,  he  reaches  the  following  somewhat  astonishing  results 
by  giving  the  gold  value  of  these  farm  products  by  four-year  periods  from  1863 
to  1894,  inclusive.  Mr.  Powers  remarks  that  Illinois  is  a  large  State,  and  its 
agriculture  is  truly  typical  of  the  husbandry  of  all  the  vast  territory  extending 
from  Ohio  to  Kansas,  inclusive,  and  from  Minnesota  to  the  cotton  belt  of  the 
South.  In  the  years  1862  to  1894,  inclusive,  Illinois  raised  a  total  of  854,711,- 
827  tons  of  the  nine  crops,  of  a  farm  value  of  $5,038,150,906  in  currejicy  or 
$4,570,148,391  in  gold. 

Average  Farm  Prices  Per  Ton  in  Gold  in  Illinois,  1862  to  1894. 


Chops. 


Corn 

Oats 

Wheat 

Barley  

Buckwheat 

Rye 

Potatoes 

Hay 

Tobacco 

Corn,  Oats  and  Wheat  (1). 
Corn,  Oats  and  Wheat  (2). 

All  Crops  (1) 

All  Crops  (2) 


1862 

1867 

1871 

1875 

1879 

1883 

to 

to 

to 

to 

to 

to 

1866 

1870 

1874 

1878 

1882 

1886 

$10.57 

$13.08 

$10.97 

$9.84 

$14.55 

$11.43 

16.42 

18.35 

16.33 

13.62 

20.68 

15.63 

2Q.17 

30.44 

32.49 

28.84 

83.10 

24.59 

24.22 

29.60 

28.16 

24.74 

29.41 

22.39 

20.95 

26.05 

29.01 

25.76 

31.65 

25.99 

16.81 

20.f;2 

18.8-i 

17.25 

23.68 

17.98 

14.89 

17.39 

23.04 

13.51 

19.87 

12.86 

7.16 

7.55 

8.70 

6.19 

9.54 

6.81 

167.24 

134.04 

156.63 

96.08 

134.25 

147.60 

14.26 

16.38 

14.26 

12.05 

18.21 

13.28 

13.69 

15.97 

14.40 

12.66 

17.72 

13.66 

12.45 

18.83 

13.17 

10.60 

16.25 

11.31 

11.98 

13.75 

13.13 

10.98 

15.59 

11.83 

1887 
to 
1890 


1891 
to 
1894 


60  $12. 
90    17 


18 

77: 

87 
(15 
11 
70 
i.  14  143.68 


1862 
to 
1894 


$11.82 

16  77 
29.55 
25.72 
25.54 
19.04 
17.39 
7.82 
145.65 
14.59 
14.59 
12.88 
12.88 


Per- 
cent- 
ages. 


50.36 
9.81 
8.49 
0.27 
0.04 
0.63 
2.37 

27.99 
0.03 


No.  1.    General  average  of  all.  No.  2.    Averaged  on  relative  importance. 

Taking  the  average  value  per  ton  in  gold  of  each  of  the  nine  crops  above 
named,  after  combining  the  several  products  in  fixed  proportion  by  weight  so 
as  to  give  each  its  relative  importance,  and  w^e  reach  as  a  final  average  the 
following  gold  value  of  all  crops  combined  : 

From  1862  to  1886,  averaged  in  gold $11.98  per  ton. 

From  1871  to  1874,  currency  price  being  reduced 

to  gold 13.13 

From  1879  to  1882,  the  period  of  great  scarcity  in 

Europe,  in  gold 15.59        " 

From  1891  to  1894,  in  gold 13.19 

1.48 


THE  FAKMER  AND   FREE   SILVER. 


Dealing  with  the  crops  of  maize  or  Indian  corn,  oats  and  wheat,  as  distinct 
from  the  other  six  crops  included  in  the  nine,  we  get  the  following  results  : 

Average  Gold  Value  of  Maize,  Oats  and  Wheat. 

1862  to  1866,  in  gold $13.69  per  ton. 

1871  to  1874.  currcDcy  prices  reduced  to  gold  ...     14.40        " 

1879  to  1882,  in  gold 17.72 

1891  to  1894,  in  gold 14.61 

These  conclusions,  verified  by  Mr.  Edward  Atkinson,  are  fully  sustained  by 
data  furnished  by  Mr.  Lucius  B.  Swift,  of  Indianapolis,  in  regard  to  the  price 
of  farm  products  in  Indiana  from  1873  to  1892.  The  prices  are  those  nearest 
to  the  farm.  They  show  approximately  what  the  farmer  realized.  The  prices 
during  the  suspension  of  specie  payments  are  reduced  to  gold  values,  and  the 
results  are  the  following  ; 


Corn,  per  bushel 

Oats,  per  bushel . . . . 
Wheat,  per  bushel. . 

Rye,  per  bushel 

Potatoes,  per  baehel 
Hay,  per  ton 


1873-1877. 


35.6 

29.6 

9.5 

52.8 

53 

89.31 


1878-1882. 


41.8 
31.6 
102.6 
70.4 
60.6 
$9.47 


1883-1887. 


37 

28.8 

79 

57.6 

50.8 

$8.21 


1888-1892. 


.39.8 
35.2 
87.2 
68 
59.4 
$9.54 


Of  the  six  crops,  it  will  be  observed  that  wheat  was  the  only  one  on  which 
the  Indiana  farmers  did  not  realize  more  in  the  last-named  period  than  in  the 
first.  The  increase  of  the  purchasing  power  of  corn  is  strikingly  illustrated  by 
Professor  Loughlin.  In  1873  a  binder  could  be  bought  for  no  less  than  769.2 
bushels  of  corn  and  in  1889  for  only  421.8. 

THE   LAW   OP   TROGRESS. 

While  the  American  farmer  has  profited  like  other  people  from  the  scientific 
advance  of  recent  years,  he  has  also  lost  by  it.  The  cheapening  of  ocean 
freights  has  served  to  place  fields  of  competition  farther  removed  from  Euro- 
pean markets  on  terms  of  equality  with  him.  Improved  machinery  in  the 
processes  of  production  by  minimizing  the  demands  on  human  labor  does  not 
promote  the  multiplication  of  bread-eaters.  The  electric  street  railroad  has 
displaced  the  horse,  and  the  bicycle  has  aided  the  process  to  such  an  extent 
that  while  so  recently  as  1892  the  15,498,140  horses  in  the  United  States  were 
valued  at  |1, 007, 593, 636,  the  value  in  1896  of  15,124,057  horses  is  set  down 
at  $500,140,186.  This  surely  cannot  be  attributed  to  "the  crime  of  '73," 
though  a  more  sudden  and  startling  contraction  of  value  than  any  of  the 
stock  example  of  the  free  silverites. 


1.49 


THE   FARMER   AND   FREE   SILVER. 


The  American  grain  farmer,  in  so  far  as  he  is  a  competitor  in  the  markets 
of  the  world,  is  no  more  exempt  from  the  penalty  of  having  the  supply  of  this 
product  outrun  the  demand  than  the  producer  of  calico  or  of  steel  rails.  In  so 
far  as  he  is  dependent  on  the  consuming  capacity  of  his  home  market  he 
can  he  helped  by  increasing  the  number  of  M^age-earners  and  bread-eaters, 
but  certainly  not  by  any  movement  calculated  to  paralyze  industry,  to  throw 
hundreds  of  thousands  of  men  out  of  employment  and  to  reduce  the  purchas- 
ing ability  of  millions.  The  average  annual  value  of  the  farm  products  of 
the  United  States  is  over  $3,500,000,000.  Of  this  the  annual  average  exported 
of  late  years  has  been  about  $600,000,000,  so  that  for  the  consumption  of 
three-fourths  of  his  products  the  American  farmer  is  dependent  on  his  home 
market.  It  is  utterly  impossible  that  prosperity  should  be  brought  to  him 
by  any  process  that  brings  ruin  to  the  rest  of  the  country.  If  the  free 
coinage  of  silver  offered  him  the  means  of  paying  his  debts  in  dollars  worth 
only  53  cents  he  would  be  no  better  off  if  he  had  not  the  dollars..  In  the 
dislocation  of  all  business  and  the  collapse  of  all  credit  that  would  attend 
the  triumph  of  the  free  silver  cause,  it  is  absurd  to  assume  that  the  farmer 
should  enjoy  the  sunshine  of  prosperity.  He  would  have  his  full  share  of  the 
bitter  consequences  of  a  widespread  and  disastrous  panic  equally  with  the 
merchant,  the  manufacturer  and  the  artisan;  he  might  not  be  the  tirst  to  feel 
the  full  force  of  the  financial  cataclysm,  but  he  would  certainly  be  the  last  to 
recover  from  it, 

THE   FARMER  AS   A  DEBTOR   AND   A   CREDITOR. 

The  assumption  that  the  farmers  are  universally  or  even  generally  in 
debt  is  manifestly  false.  Many  of  them  are  in  debt  on  their  current  accounts, 
but  a  change  in  the  currency  system  would  have  very  little  influence  on  these. 
According  to  the  census  returns,  less  than  one  farmer  in  five  owes  money  on  a 
mortgage,  and  the  property  mortgaged  is  valued  at  three  times  the  total  of 
the  obligations.  Dealing  with  ten  great  States  in  which  the  crops  were  grown 
on  which  his  tabular  comparisons  are  made,  Mr.  Powers  says  that:  "An 
analysis  of  the  mortgage  debt  of  any  one  of  these  States  will  show  that  in  1890 
the  relative  burden  was  not  much,  if  any,  over  one-half  as  great  as  in  1880." 
The  mortgage  foreclosures  of  these  States  have  been  compiled  over  a  long  period 
for  only  one  of  these  States — that  of  Minnesota.  This  compilation  has  been 
made  by  Mr.  Powers  himself.  He  says  :  '*  The  statistics  of  this  State  disclose 
a  relative  frequency  of  foreclosures,  less  in  1893  than  in  any  other  year  of 
Minnesota  history.  It  shows  that  in  that  year  it  was  less  than  one-fourth  as 
great  relatively  as  in  1873,  or  in  the  period  before  the  noted  silver  legislation." 

But,  as  Mr,  Trenholm  has  pointed  out :  "  The  farmers  are,  in  one  sense, 
the  great  creditor  class.  The  crop  and  the  stock  are  debtors  to  the  farmer  not 
only  for  the  capital  invested,  but  also  for  the  value  of  all  labor  bestowed  on 

1.50 


THE  FARMER   AND   FREE   SILVER. 


them  by  the  farmer  and  his  family.  The  farmers,  therefore,  are  vitally  inter- 
ested in  our  money  laws,  for  there  is  a  long  time  between  sowing  and  reaping, 
and  the  farmer  needs  to  collect  from  the  produce  of  his  fields  and  flocks  and 
herds  as  good  money  as  he  puts  into  these  investments."  When  the  farmer 
gets  into  debt  it  is  usually  for  the  purpose  of  increasing  the  yield  of  his  crops, 
or  securing  improved  machinery  to  sow,  to  cultivate  and  to  reap.  If  he  is  a 
progressive  man  he  will  want  to  go  on  increasing  the  volume  of  his  product  in 
proportion  to  the  cost  of  raising  it,  so  that  he  may  have  a  larger  surplus.  Like 
any  other  man  engaged  in  productive  industry,  he  is,  in  short,  likely  to  be  a 
borrower  from  time  to  time.  Even  if  the  free  silver  device  could  enable  him 
to  get  more  easily  out  of  such  debt  as  he  may  have  for  the  moment,  it  would 
make  it  infinitely  more  difllcult  for  him  to  borrow  again.  For  it  would  drive 
capital  out  of  the  country  and  cause  the  United  States  to  be  avoided  like  a 
plague  spot  by  all  foreign  investors.  There  would  not  only  be  far  less  money 
than  before,  but,  what  is  fifty  times  more  important  than  the  actual  stock  of 
money,  there  would  be  very  much  less  credit.  The  farmer  is  apt  to  regard 
himself  now  as  the  least  favored  of  borrowers  ;  under  a  colossal  scheme  of 
repudiation,  which  can  be  carried  out  only  by  his  vote,  his  chances  of  getting 
credit  would  be  very  much  worse.  His  probable  gains  at  any  point  of  the 
process,  save  perhaps  in  the  scaling  down  of  his  debts,  are  purely  visionary ; 
his  losses  even  before  the  force  of  the  long  and  ruinous  panic  had  spent  itself, 
would  easily  exceed  any  gains  that  the  most  hopelessly  indebted  of  his  fellows 
could  possibly  secure. 

THE  FOREIGN  BALANCE  OP   TRADE. 

The  results  in  the  foreign  market  would  be  nob  less  disastrous  and  would 
be  out  of  all  proportion  to  any  favor  the  farmer  could  do  to  the  silver-mine 
owner  by  voting  for  the  free  coinage  of  silver.  The  product  of  silver  from 
all  the  silver  mines  of  the  United  States  during  the  last  five  years,  1891-1895, 
has  averaged,  even  in  "coining  value,'*  but  $74,000,000  a  year,  or  at  the 
actual  commercial  value  of  silver  but  $45,500,000  a  year — less  than  1-50,  or  3 
per  cent,  of  the  value  of  farm  products  and  less  than  1-12,  or  8  per  cent,  of  the 
actual  export  of  farm  products  a  year.  Other  countries  would  not  buy  more 
of  our  farm  products  unless  the  prices  were  lowered,  while  farmers  would  be 
driven  to  attempt  to  sell  more  abroad  by  lowered  prices  because  of  the  lack  of 
demand  at  home  caused  by  hard  times.  The  total  returns  of  the  increased 
export  might  not  be  greater  than  the  present.  It  is  with  the  product  of  our 
farms  as  well  as  our  manufactures  that  we  are  to-day  paying  the  interest  on 
the  moneys  loaned  us  by  the  investment  of  capital  from  abroad.  If  it  were  at 
all  true  that  the  balance  of  trade  is  really  settled  in  money,  instead  of  by  the 
process  of  exchange,  Great  Britain  alone  would  have  had  to  pay  us  in  the  past 

five  years  moro  gold  than  •^lists  in  Great  Britain  aa4  tb^  IJuited  States 


THE    FARMER  AND   FREE   SILVER. 


together.  During  those  five  years  our  trade  with  Great  Britain  alone  areraged 
an  export  of  $436,000,000  and  an  import  of  $160,000,000,  leaving  a  "balance 
of  trade"  of  $276,000,000  a  year  or  $1,384,000,000  in  five  years.  This 
balance  is  offset  in  a  great  measure  by  our  interest  payments  abroad.  If  this 
country  were  to  go  upon  a  silver  basis,  the  credit  of  the  country  would  be 
weakened  abroad  and  the  rate  of  interest  would  rise  and  there  would  be  still  less 
net  return  for  American  products  exported.  Thus  under  "free  silver"  the 
farmer  would  be  at  disadvantage  both  in  the  home  and  in  the  foreign 
market. 

RAILROAD   FREIGHT   RATES. 

Mr.  Bryan  has  told  farmers  that  railroad  rates  have  not  been  reduced  to 
keep  pace  with  falling  prices.  On  the  contrary,  transportation  rates  have  fallen 
more  than  almost  any  other  prices.  In  1873  and  1873,  all-rail  rates  per  bushel 
of  wheat,  Chicago  to  New  York  were  33  cents  ;  in  1895  but  12  cents.  By  lake- 
and-rail,  the  rate  was  28  cents  in  1872  and  7  cents  in  1895  ;  by  lake-and-canal,  24 
cents  in  1872  and  4  cents  in  1895.  Canal  freights  between  Buffalo  and  New 
York  averaged  13  cents  in  1872  and  2  1-5  cents  in  1895.  The  average  rate  of 
freight  per  ton  per  mile  on  all  railroads  in  the  United  States  has  fallen  from 
2  1-5  cents  in  1872  to  less  than  |-  cent  in  1895.  These  figures  show  that 
railroad  rates  have  fallen  more  than  crop  prices.  If  free  silver  is  to  increase 
prices,  the  farmer  will  scarcely  be  benefited  should  this  apply  to  railroad 
freight  rates. 

INDEPENDENCE   OP   THE   FARMER. 

"  The  farmer,"  says  Mr.  Bryan,  "  is  the  most  helpless  victim  of  circumstances 
of  all  the  producers  of  wealth."  The  contrary  is  true.  Times  may  be  hard, 
be  may  not  make  money,  but  he  can  live  on  what  he  raises.  Corn  and  pork, 
chickens  and  eggs,  vegetables  and  fruit  will  keep  a  man  and  his  family  alive 
and  well,  even  if  they  do  have  to  wear  old  clothes  and  stop  buying  groceries. 
But  when  the  mill  shuts  down  the  workmen  cannot  eat  the  cloth  or  the  shoes 
or  the  blankets  he  has  made.  If  work  stops  and  he  has  no  savings,  starvation 
stares  him  in  the  face.  This  is  why  Mr.  Bryan's  description  of  the  farmer  as 
driven  between  the  bulls  and  bears  of  Wall  street  is  so  false.  They  cannot 
blight  the  corn  or  kill  the  pigs  if  they  would.  The  farmer  is  really  the  only 
independent  man.  He  can  always  live.  But  he  wants  to  do  more.  He  wants 
to  make  money.  This  he  can  only  do  when  the  country  is  prosperous — that  is 
to  say,  when  the  mills  are  running  and  houses  building,  and  everybody  is  earn- 
ing a  good  living.  And  this  is  only  possible  in  a  country  that  has  a  fixed  stand- 
ard of  value.  Who  will  contract  for  the  future  to  be  paid  in  dollars  when  he 
knows  not  what  a  dollar  will  mean  six  months  hence.  It  is  just  this  uncer-^ 
tainty  that  has  killed  business  for  the  last  three  years. 

1.52 


THE    FARMER    AND    FREE   SILVER. 


CENSUS  FACTS  AS  TO  FARM  VALUES  AND  MORTGAGES. 

The  final  proof  that  the  farming  industry  has  not  been  ruined  by  the  "crime 
of  '73  "  is  found  in  the  statistics  of  the  growth  of  that  great  interest  given  by 
the  United  States  census.  The  number  of  farms  in  1870  was  2,659,985  ;  in 
1890,  4,564,641 — an  increase  of  nearly  80  per  cent.  The  acreage  had  increased 
from  407,735,041  in  1870  to  623,218,619  in  1890— over  50  per  cent.  The  number  of 
acres  improved  had  increased  from  188,921 ,099  in  1870  to  357,616,755  in  1890— 
or  nearly  double,  and  the  percentage  of  unimproved  land  in  farms  had  been  re- 
duced from  53  per  cent,  to  42  per  cent,  of  the  total.  The  average  size  of  the  farms 
had  decreased  from  153  acres  in  1870  to  137  acres  in  1890,  but  there  had  been 
an  increase  in  the  average  size  between  1880  and  1890.  The  decrease  in  size  of 
farms  had  been  chiefly  in  the  New  England  States,  New  York,  New  Jersey  and 
Pennsylvania,  where  the  average  holding  has  steadily  gone  down,  and  in  the 
Southern  States,  where  it  has  fallen  very  greatly,  owing  to  the  increased  cultiva- 
tion of  small  farms  by  the  negroes,  which  has  brought  down  the  average.  In  the 
great  central  West,  reaching  from  Ohio  to  the  Dakotas,  the  average  acreage  of 
farms  has  greatly  increased.  The  number  of  farms  of  the  profitable  size  of 
from  100  to  500  acres  has  increased  in  larger  proportion  than  any  other  kind ; 
1,695,983  farms  in  1880  to  2,008,694  in  1890,  the  great  part  of  this  wholesome 
increase  being  in  the  central  West.  The  valuation  of  farming  property  has  in- 
creased for  lands,  fences  and  buildings,  from  $9,262,000,000  in  1870  to  $13,279,- 
000,000  in  1890;  in  implements  and  machinery  from  $330,000,000  in  1870  to  $494,- 
000,000  in  1890 ;  in  live  stock  from  $1,535,000,000  in  1870  to  $2,208,000,000  m 
1890,  these  values  having  nearly  doubled  in  the  great  central  West,  while 
they  have  actually  decreased  in  the  New  England  States,  New  York,  New  Jersey 
and  Pennsylvania.  This  shows  a  steady  increase  in  value  in  farming  property 
except  in  the  Eastern  States,  for  the  twenty  years  at  the  beginning  of  v/hich 
silver  was  "  demonetized." 

In  the  census  of  1890  a  special  investigation  was  made  as  to  farm  mortgages. 
This  had  not  been  made  in  previous  census  years,  so  that  there  are  no  statistics 
for  comparison.  These  figures  of  1890  show  that  out  of  $13,279,000,000  value 
of  all  farms  $3,054,000,000  was  the  value  of  farms  occupied  by  owners,  on 
which  there  was  a  mortgaged  indebtedness,  and  that  the  amount  of  the  incum- 
brance was  $1,085,000,000  or  35  per  cent  of  the  total  value.  This  leaves  $10,- 
224,000,000,  as  the  combined  value  of  the  farms  owned  free  of  any  incumbrance 
and  hired  farms.  The  proportion  of  hired  farms  varies  greatly  in  the  dif- 
ferent states,  being  highest  in  the  New  England  and  Southern  States,  and  low- 
est in  the  great  central  West.  This  is  undoubtedly  because  so  many  foreign 
immigrants  have  rented  small  holdings  in  the  New  England  States  and  so  many 
negroes  have  done  the  same  of  late  years  in  the  Southern  States.  At  the  same 
time  careful  investigations  were  made  as  to  the  average  annual  rate  of  interest 

1.53 


THE    FARMER   AND   FREE   SILVER. 


paid  on  the  farm  mortgages  in  several  States.  The  average  for  the  whole  country 
was  just  about  7  per  cent,  but  the  figures  ranged  from  below  6  per  cent,  in  the 
New  England  States  to  7,  8  and  9  percent  in  the  central  West,  and  as  high  as  10 
and  even  12  per  cent,  in  the  far  West.  These  figures  furnish  the  key  to  the  real 
difficulties  of  the  American  farmer,  which  are  different  in  the  East  from  what 
they  are  in  the  West. 

THE  REAL  DIFFICULTIES. 

Farming  in  the  Eastern  States  has  been  a  declining  industry  because  of  the 
superior  advantages  of  the  West ;  farming  in  the  West  has  been  an  increasing 
industry,  which  has  nevertheless  suffered  a  serious  blow  during  the  hard 
times  of  the  past  five  years.  The  eastern  farmer  can  no  longer  utilize  the  small 
and  rocky  farm  of  that  section  for  the  large  crops  which  the  West  can  pro- 
duce in  such  profusion  and  at  so  much  less  cost ;  consequently,  the  Eastern 
States  are  being  divided  into  smaller  farms,  utilized  mere  and  more  by  new 
comers— many  of  them  of  foreign  nationalities— who  are  giving  more  attention 
to  the  small  crops.  The  West  has  greatly  increased  the  actual  value  of  its  farms 
and  everything  connected  with  them,  but  the  value  of  farm  products  has  not 
correspondingly  increased.  During  the  past  few  years  not  only  has  our  product 
greatly  increased — particularly  in  cotton — but  new  and  vast  countries  have 
come  into  the  world's  competition,  particularly  in  wheat.  This  enormous  pro- 
duction— of  great  benefit  to  the  world  at  large,  in  its  provision  against  famine — 
as  has  already  been  shown,  reduced  the  price  of  these  particular  crops  with  a 
very  serious  effect  upon  the  southern  planter  and  the  western  farmer.  But  it 
has  had  absolutely  nothing  to  do  with  the  demonetization  of  silver,  and  it  is  a 
cause  beyond  direct  cantrol.  The  remedy  is  that  the  arable  acreage  should  be 
diverted  more  largely  to  other  crops,  as  is  more  and  more  being  done.  But 
the  figures  suggest  another  great  cause  of  the  farmer's  condition  which  is  at 
this  moment  within  his  control.  The  western  farmer  who  has  incumbered  his 
farm  is  paying  something  like  10  per  cent,  interest  on  the  money  borrowed. 
The  reason  for  the  high  rate  of  interest  in  the  Western  States,  increasing 
steadily  from  east  to  west,  is  the  uncertainty  which  exists  in  the  minds  of 
the  lendeis  as  to  the  security  of  their  money.  During  the  past  five  years  the 
interest  has  added  up  close  to  50  per  cent.,  or  half  of  the  money  borrowed. 
The  rate  of  interest  has  been  enormously  increased  by  the  uncertainty,  par- 
ticularly of  foreign  loaners,  as  to  the  maintenance  of  the  gold  standard  in  this 
country.  This  was  shown  strikingly  at  the  time  of  the  bond  issue,  when 
the  Secretary  of  the  Treasury  informed  Congress  that  he  could  make  a  saving 
in  the  rate  of  interest  amounting  to  $16,000,000,  if  Congress  would  declare 
the  bonds  "  payable  in  gold"  instead  of  merely  "in  coin."  The  election  of 
Mr.  Bryan  would  mean  an  increase  in  the  rate  of  interest,  and  his  defeat  a 
decrease  in  the  rate  of  interest,  because  of  the  action  of  those  laws  of  credit 

1.54 


THE    FARMER   AND    FREE   SILVER. 


which  are  beyond  control  of  any  men  or  set  of  men.  The  difference  would 
mean  millions  of  dollars  to  the  American  farmer.  Least  of  all  men  can 
the  American  farmers,  who  are  in  debt,  afford  to  vote  for  "free  silver," 
which  would  not  put  any  more  dollars  in  their  pockets  with  which  to  pay  off 
their  mortgages,  and  would  surely  and  swiftly  increase  the  rate  of  interest, 
which  they  must  pay  when  they  renew  their  mortgages.  This  is  true  of  all 
farmers  who  have  mortgaged  their  farms  and  to  whom  appeal  is  made  by  the 
orators  of  the  silver  party.  To  the  great  body  of  American  farmers  who  are 
not  in  debt,  no  argument  whatever  can  be  made  which  should  induce  them  to 
thinlt  for  a  moment  of  voting  for  "  free  silver." 


1.55 


SILVER   AND    PRICES. 

The  alleged  connection  between  the  fall  in  the  price  of  silver  and  that  of  various  products 
of  agriculture  and  manufacturing  industry  ia  disproved  by  the  facts  of  experience  no  less  than 
by  the  principles  of  political  economy.  If  the  theory  of  the  silver  party  be  a  correct  one  all 
prices  should  have  moved  up  and  down  in  sympathy  with  the  changing  quotations  of  the  white 
metal.  That  nothing  of  the  sort  has  happened  is  but  one  of  the  many  demonstrations  of  how 
destitute  of  foundation  is  the  whole  structure  of  the  free  silver  argument. 

Demonstration  has  already  been  offered  of  the  fact  that  there  is  no  possible 
relation  between  the  use  of  silver  in  the  coinage  and  the  course  of  prices,  and 
that,  if  there  were,  on  the  theory  of  free  silver  advocates,  the  general  course  of 
the  prices  of  commodities  would  have  been  entirely  different.  Proof  has  also 
been  presented  that  while  the  prices  of  certain  products  of  the  farm  have  gone 
down  in  the  last  twenty -five  years,  the  prices  of  others  have  advanced,  which 
would  not  have  been  possible  had  they  been  governed  by  the  fluctuations  in 
silver.  There  is,  however,  no  point  of  the  free  silver  creed  so  obstinately 
defended  as  this  :  "  Stoppage  of  coinage  without  the  stoppage  of  the  production 
of  commodities  has  limited  the  supply  of  money  and  increased  the  quantity  of 
commodities.  The  cheapness  of  the  commodities  is  but  another  expression 
for  the  dearness  of  money."  One  would  like  to  know  what  is  meant  by  the 
dearness  of  money  at  a  time  when  there  is  in  the  great  financial  centres  of  the 
world  a  congestion  of  idle  capital,  when  the  amount  of  the  paper  circulation  of 
the  chief  European  banks  is  far  within  the  volume  which  their  gold  reserve 
would  justify,  and  when  the  returns  paid  by  first-class  securities  have 
remained  for  a  long  time  at  a  point  unprecedentedly  low.  If  this  be  a  time  of 
cheap  commodities  it  is  emphatically  a  time  of  cheap  money,  too,  and  one  rea- 
son for  the  low  rates  which  either  is  able  to  command  is  that  there  is  more 
offering  than  the  international  market  can  absorb. 

The  history  of  the  whole  course  of  modern  production  is  one  of  labor- 
saving  devices,  and  hence  of  increasing  cheapness.  As  has  been  remarked  : 
In  1830,  when  we  used  to  work  fourteen  hours  a  day  in  the  manufacture  of 
cotton  goods,  a  single  operator  could  produce  only  about  four  thousand  yards 
in  a  year,  in  1840  about  nine  thousand  yards  a  .^ear,  and  in  1890,  with  the 
working  time  reduced  to  ten  hours  a  day,  an  operator  produced  over  thirty 
thousand  yards  of  the  same  goods. 

The  two  great  revolutionary  changes  affecting  modern  production  and 
values  have  been  in  motive  power  and  industrial  mechanism.  From  the 
beginning  of  the  change,  it  has  been  clear  that  the  new  motive  powers  of  steam 
and  electricity  and  the  new  labor-saving  mechanisms  must  immensely  reduce 
the  cost  of  every  form  of  manufactured  product ;  and  also  that  the  reduction 

1.56 


SILVER   AND    PRICES. 


of  the  cost  must  bring  about  a  proportionate  increase  in  production  ;  an  increase 
not  only  of  machine-made  articles  but  also,  in  a  lesser  degree,  of  natural  prod- 
ucts. 

A  QUACK  KEMEDY  FOR   HARD  TIMES. 

The  claim  that  the  free  coinage  of  silver  would  restore  prosperity  by 
advancing  prices  proceeds  upon  three  equally  fallacious  assumptions  : 
1.  That  high  prices  are,  of  themselves,  a  necessary  accompaniment  of  prosper- 
ity ;  2.  That  prices  have  fallen  because  of  the  fall  in  silver  ;  and,  3.  That 
prices  would  advance  with  the  appreciation  of  the  price  of  silver.  As  to 
the  first  illusion,  the  criticism  of  Professor  Laughliu  is  apt  and  exhaustive  : 

"  Goods,  after  all,  are  the  basis  of  all  exchange.  Money  should  not  be 
mixed  up  in  idea  with  all  goods.  Money  is  only  one  article.  There  are 
thousands  of  other  articles,  which  we  are  daily  using.  These  articles  vastly 
outnumber  money  itself.  There  may  be  $1,600,000,000  of  all  kinds  of 
money  in  the  United  States,  but  the  other  articles  of  wealth  are  enormously 
greater  in  value.  People  sometimes  assume  that  money  and  goods  are  the 
same  thing,  and  that  demand  comes  only  from  money,  when,  in  truth,  the 
demand  depends  upon  the  goods  primarily,  and  the  money  is  only  a  go- 
between,  or  like  a  gate  through  which  the  goods  go  to  get  to  other  goods. 
No  man's  wealth  is  merely  money  in  his  pocket.  His  wealth  and  his  demand 
are  synonymous  with  the  salable  goods  and  property  he  owns. 

"  So  when  we  see  a  restoration  of  prosperity,  accompanied  by  rising 
prices  in  some  industries,  note  that  this  has  not  been  due  to  a  change  in 
the  quantity  of  the  circulation,  but  to  an  increasing  offer  of  purchasing 
power,  merely  expressed  in  terms  of  money,  for  the  products  of  these  par- 
ticular industries.  And,  after  a  depression,  this  will  spread  until  the  value 
and  prices  of  all  goods  formerly  produced  at  a  loss  will  sell  at  such  prices 
relative  to  other  goods  that  their  production  will  be  remunerative  to  both 
employer  and  employed.  But  what  is  back  of  it  is  the  generally  increasing 
purchasing  power  of  the  community,  due  to  owning  or  producing  more  goods, 
and  not  to  any  increasing  *  volume  of  the  currency.'  This  explains  why  it 
is  that  a  good  wheat  or  corn  crop  means  a  general  quickening  of  trade  and 
prosperity.  When  more  goods  are  produced  men  have  more  purchasing 
power.  'And  this  further  explains  why  it  is  that,  when  prosperity  returns  and 
men  generally  have  more  goods,  and  so  more  purchasing  power,  they  cease  to 
talk  about  the  need  of  '  more  circulating  medium.'  There  is  no  need  of  quack 
medicines  when  health  returns.  And  when  healthy  industrial  conditions 
return  there  will  be  no  more  place  for  the  quack  silver  medicines  at  16  to  1." 

THE   ILLUSION  OF  HIGH  PRICES. 

"  There  is  absolutely  no  gain  derived  from  a  general  change  in  all  prices 
brought  about  by  altering  the  value  of  money.     Industry  is  not  boomed  by 

1.57 


SILVER   AND   PRICES. 


raising  all  prices  alike.  No  manufacturer  makes  more  profit  by  higher  prices 
of  hi  product  when  all  the  materials  he  uses  have  risen  in  the  same  propor- 
tion. To  suppose  that  one  is  made  richer  by  merely  expressing  the  same  old 
property  and  goods  in  terms  of  a  money  that  has  become  less  valuable  is  a 
stupid  delusion.  To  believe  in  it  is  to  follow  a  momentary  will-o'-the-wisp. 
The  object  is  forever  receding. 

''The  only  way  in  which  a  rise  of  his  prices  can  be  ol  advantage  to  a 
producer  is  by  a  partial,  not  a  general,  rise.  That  is,  since  a  general  rise  in 
all  prices  leaves  every  commodity  in  just  the  same  unaltered  relations  to 
every  other  commodity,  the  only  gain  to  a  single  producer  arises  from  the  fact 
that  his  goods  have  risen  when  others  have  not.  Such  a  partial  change  of 
prices  indicates  a  change  in  the  value  of  some  goods  to  other  goods.  One  man 
thus  gains  at  the  expense  of  other  men.  Some  goods  buy  more  than  before 
solely  because  other  goods  have  not  risen  in  price.  If,  for  example,  the 
leather  industry  had  been  depressed,  prices  low  and  employment  irregular 
because  demand  had  fallen  off,  then,  when  people  begin  to  find  that  their 
stocks  of  leather  are  used  up,  and  more  leather  is  needed,  a  perceptible  increase 
in  demand  for  leather  is  noticed  in  the  trade.  The  additional  leather  will  not 
be  furnished  until  the  price  (owing  to  a  better  demand)  rises  so  that  a  fair 
profit  can  be  made.  This  rise  of  price  is  merely  the  result  of  a  changed  and 
improving  demand.  It  restores  leather  to  a  better  relation  to  other  goods  than 
before.  It  has  altered  its  value  relatively  to  other  articles  solely  because  the 
change  affected  leather  in  particular. 

"  Such  a  rise  in  prices,  affecting  only  a  few  industries,  shows  an  altered 
value  of  their  products  and  is  a  distinct  gain  to  persons  in  the  industries 
affected.  Observers  of  such  a  process,  seeing  this  unmistakable  gain,  jump 
to  the  conclusion  that,  if  a  raise  of  prices  is  gainful  to  one  industry,  it  must  be 
for  all  industries.  Just  here  lies  the  fallacy.  The  delusion  that  a  rise  in  prices 
in  general  is  a  gain  has  been  punctured.  Just  as  soon  as  the  rise  is  general, 
and  not  peculiar  to  only  a  few  industries,  it  ceases  to  be  of  advantage  to  any- 
one. For,  in  that  event,  no  one  has  any  advantage  relatively  to  anyone  else. 
It  is  perfectly  true  that  a  rise  of  prices  in  particular  cases  gives  a  gain  to 
employer  or  employed;  but  it  is  decidedly  not  true  if  this  rise  of  prices  is 
general  and  affects  all  industries.  The  delusion  consists  of  mixing  the  particular 
with  the  general ;  in  supposing  that  what  is  true  of  particular  industries  is 
true  of  industries  in  general.  It  is  an  error  of  dwelling  upon  a  gain  due  to 
relative  advantages  which  must  disappear  the  moment  the  relative  advantage 
ceases  to  exist." 

PRICES  THAT   ADVANCED  AS   SILVER  DECLINED. 

The  claim  that  the  fall  in  the  price  of  silver  is  alike  the  measure  and  the 
cause  of  the  fall  in  the  price  of  commodities  has  already  been  disposed  of  in 

1.58 


SILVER  AND   PRICES. 


dealing  with  the  prices  of  products  of  American  agriculture.  Outside  of  our 
chief  cereal  crops,  however,  there  is  a  considerable  range  of  products  of  the 
soil  whose  course  of  price  absolutely  disproves  the  theory  of  the  free  silver 
advocates.  Consulting  the  record  of  wholesale  prices  of  commodities  which  has 
been  kept  for  fifty  years  by  the  London  "  Economist  "  and  it  will  be  found, 
for  example,  that  the  price  of  coffee  which  between  1845  and  1850  ranged 
from  44  to  54  shillings  per  hundred  weight  in  London,  was  quoted  from  59  to 
83  shillings  on  January  1,  1883,  from  78  to  85  shillings  on  January  1,  1888 
and  from  80  to  92  shillings  on  January  1,  1895.  There  is  here  obviously  no 
connection  whatever  with  any  changes  in  the  price  of  silver,  and  there  is  a 
price  movement  extending  over  ten  or  twelve  years  absolutely  contrary  to  that 
of  silver.  On  a  lesser  scale,  the  prices  of  flax  in  London  have  fluctuated  out 
of  all  correspondence  with  the  price  of  silver.  It  was  as  high  as  35  pounds  per 
ton  on  January  1,  1879,  and  as  low  as  27  pounds  on  January  1,  1884,  it  rose  to 
32  pounds  by  January  1,  1887  and  fell  again  to  27  pounds  a  year  later.  It 
struck  the  still  lower  level  of  23  pounds  in  1890  and  1891  and  recovered  to  31 
pounds  by  July  1,  1893,  and  retained  this  price,  which  is  the  highest  in  fifteen 
3^ears,  down  to  January  1,  1895.  The  course  of  Russian  hemp  has  been  some- 
what similar.  It  was  quoted  at  25  pounds  per  ton  on  January  1,  1879,  had 
risen  to  29  pounds  10  shillings  by  January  1,  1884,  dropped  to  26  pounds  on 
January  1,  1890  and  to  18  pounds  on  January  1,  1892,  recovering  again  six 
months  later  and  holding  most  of  the  advance,  so  that  on  January  1,  1895,  the 
price  was  24  pounds  per  ton,  as  it  had  been  for  most  of  the  year  before.  The 
course  of  Russian  tallow  is  equally  destructive  of  the  free  silver  theory  of 
prices.  Its  average  between  1845  and  1850  was  44  shillings  per  hundred  weight, 
and  it  was  3G  shillings  and  6  pence  on  January  1,  1879,  45  shillings  on  January 
1,  1880,  35  shillings  on  January  1,  1886,  and  31  shillings  on  January  1,  1891, 
and  by  July  1,  1893,  had  reached  48  shillings,  at  which  price  it  was  still  quoted 
on  January  1,  1895.  The  price  of  timber  tested  by  that  of  Canadian  yellow 
pine  in  London  shows  what  on  the  free  silver  theory  is  an  equally  inexplicable 
series  of  fluctuations.  The  average  price  per  load  between  1845  and  1850  was 
65  to  71  shillings  ;  on  January  1,  1879,  it  was  from  85  to  95  shillings.  On  Jan- 
uary 1,  1887,  the  price  ruled  as  low  as  50  to  90  shillings.  On  January  1,  1890, 
it  rose  as  high  as  97  to  115  shillings,  dropping  again  by  January  1, 1891,  to  75 
to  110  shillings.  Since  that  time  it  has  gone  up  and  down,  finally  reaching  on 
January  1,  1895,  the  relatively  high  figure  of  92  to  115  shillings. 

A  CONTRADICTORY  THEORY. 

The  theory  that  prices  would  advance  with  the  appreciation  of  the  value  of 
silver  is  an  obviously  contradictory  one.  If  a  53-cent  dollar  were  to  be  the 
measure  of  value,  the  prices  of  merchandise  would,  of  course,  be  marked  up 
to  meet  the  change  in  the  standard,  but  the  value  of  various  commodities  com- 

1.59 


SILVER   AND   PRICES. 


prising  the  mass  of  merchandise  would  remain  unchanged  as  between  each 
other.  If  the  bullion  in  the  silver  dollar  under  free  coinage  came  to  be  worth 
63  cents,  or  even  73  cents,  prices  measured  by  the  rising  standard  would,  of 
course,  recede,  and  if  the  dream  of  the  candidate  were  to  be  realized,  and  an 
ounce  of  silver  came  to  be  worth  $1.29  in  gold,  prices  would  revert  to  the  figure 
they  hold  under  the  present  standard,  subject  merely  to  any  new  conditions  of 
supply  or  demand  that  might  arise  in  the  interim.  As  has  been  well  said  ; 
Whether  you  measure  a  tree  with  a  foot-rule  or  with  a  yard-stick,  the  tree  re- 
mains unchanged  in  its  own  height ;  and  a  number  of  trees,  when  compared 
as  to  relative  heights,  bear  the  same  proportion  to  each  other  whether  their  heights 
are  expressed  in  feet  or  yards.  John  Stuart  Mill,  whom  the  silver  men  are 
wont  by  a  garbled  quotation  to  rank  as  an  advocate  of  the  "  quantity  theory  " 
of  price,  sums  up  the  political  economy  of  the  question  as  follows  : 

"The  mere  introduction  of  a  particular  mode  of  exchanging  things  for  one 
another,  by  first  exchanging  a  thing  for  money  and  thea  exchanging  the  money 
for  something  else,  makes  no  difference  in  the  essential  character  of  the  trans- 
actions. It  is  not  with  money  that  things  are  really  purchased.  Nobody's 
income  (except  that  of  the  gold  or  silver  miner)  is  derived  from  the  precious 
metals.  The  pounds  or  shillings  which  a  person  receives  weekly  or  yearly  are 
not  what  constitutes  his  income.  They  are  a  sort  of  tickets  or  orders,  which 
he  can  present  for  payment  at  any  shop  he  pleases,  and  which  entitle  him  to 
receive  a  certain  value  of  any  commodity  that  he  makes  choice  of.  The  farmer 
pays  his  laborers  and  his  landlord  in  these  tickets  as  the  most  convenient  plan 
for  himself  and  the:n  ;  but  their  real  income  is  their  share  of  his  corn,  cattle 
and  hay,  and  it  makes  no  essential  difference  whether  he  distributes  it  to  them 
directly  or  sells  it  for  them  and  gives  them  the  price.  *  *  *  There  cannot, 
in  short,  be  intrinsically  a  more  insignificant  thing,  in  the  economy  of  society, 
than  money,  except  in  the  character  of  a  contrivance  for  sparing  time  and 
labor.  It  is  a  machine  for  doing  quickly  and  commodiously  what  would  be 
done,  though  less  quickly  and  commodiously,  without  it ;  and,  like  many 
other  kinds  of  machinery,  it  only  exerts  a  distinct  and  independent  influence 
of  its  own  when  it  gets  out  of  order." 

THE  ECONOMIC  THEORY  OF  VALUE. 

Another  way  of  illustrating  the  same  truth  is  the  following  lucid  exposition 
by  MacLeod : 

"  The  value  of  anything  is  always  something  external  to  itself.  Hence  a 
single  object  cannot  have  economic  value.  A  single  object  cannot  be  equal  or 
distant.  If  an  object  is  said  to  be  equal  or  distant,  we  must  ask,  equal  to 
what  ?  or,  distant  from  what  ?  So  if  any  quantity  is  said  to  have  value,  we 
must  ask,  value  in  what  ?  And  as  it  is  absurd  to  speak  of  absolute  or  intrinsic 
distance,  or  absolute  or  intrinsic  equality,  so  it  is  equally  absurd  to  speak  of 

1.60 


SILVER   AND   PRICES. 


absolute  or  intrinsic  value.  It  is  impossible  to  predicate  that  a  quantity  has 
value  without  at  the  same  time  implying  that  it  can  be  exchanged  for  some- 
thing else  ;  and,  of  course,  everything  it  can  be  exchanged  for  is  its  value  in 
that  commodity.  Hence  any  economic  quantity  has  as  many  values  as  quan- 
tities it  can  be  exchanged  for,  and  if  there  is  nothing  for  which  it  can  be 
exchanged,  it  has  no  value. 

"  Any  economic  quantity  may  have  value  in  terms  of  many  other.  Sup- 
pose that  A  is  ten  guineas  then  B  may  any  one  of  the  other  three  species  of 
economic  quantities.  It  may  be  a  watch,  or  so  much  corn,  or  wine,  or  clothes, 
or  any  other  material  chattel.  Or  it  may  be  so  much  labor,  instruction,  or 
amusement,  or  service.  Or  it  may  be  a  right  of  action,  or  a  debt,  or  the 
funds,  or  a  copyright,  or  any  abstract  right.  Each  of  these  species  of  property 
is  of  the  value  of  ten  guineas,  and  it  follows  that  each  of  them  is  equal  in 
value  to  the  other ;  because  things  which  are  equal  to  the  same  thing  are  equal 
to  each  other.  The  value  of  the  money  in  the  pockets  of  the  public  is  the 
products,  services  and  rights  it  can  purchase.  The  value  of  the  goods  in  the 
warehouses  of  merchants  and  traders  is  the  money  in  the  pockets  of  the 
public." 

"The  value  of  an  incoi-poreal  right  is  the  thing  promised  which  may  be 
demanded.  The  value  of  a  five-pound  note  is  five  sovereigns  ;  the  value  of  a 
postage  stamp  is  the  carriage  of  a  letter  ;  the  value  of  a  railway  ticket  is  the 
journey ;  the  value  of  an  order  to  see  the  play  is  seeing  the  play  ;  the  value  of 
a  promise  to  cut  a  man's  hair  is  the  cutting  of  the  hair  ;  the  value  of  an  order 
for  milk,  bread,  wine,  soup,  coals,  etc.,  is  the  milk,  bread,  wine,  etc.  If  I 
want  a  loaf  of  bread  which  costs  a  shilling,  what  difference  does  it  make  to 
me  whether  I  have  a  shilling  or  the  promise  of  the  baker  to  give  me  a  loaf  ? 
It  is  clear  that  in  this  case  the  shilling  and  the  promise  are  of  exactly  the 
same  value  to  me.  Suppose  that  the  price  of  cutting  a  man's  hair  is  a  shilling, 
what  difference  does  it  make  to  me  whether  I  have  a  shilling  or  the  promise  of 
the  hairdresser  to  cut  my  hair  ?  In  this  case  it  is  clear  that  the  shilling  and 
the  promise  are  exactly  equal  value  to  me.  In  short,  in  the  case  of  every 
product  and  service,  the  money  to  purchase  it  with  and  a  promise  to  render 
the  product  or  service  are  exactly  equal  value  in  each  separate  case. 

*'  Now,  what  is  money  by  the  unanimous  consent  of  economists  ?  It  is 
nothing  but  a  general  right  or  title  to  demand  a  product  or  service  from  any 
person  who  can  render  them,  if  another  cannot ;  money  has  general  and  per- 
manent value,  while  each  of  these  promises  has  only  particular  and  precarious 
value.  Each  of  these  separate  rights  then  is  of  exactly  the  same  nature  as 
money,  but  it  is  of  an  inferior  degree.  But  they  are,  each  of  them,  economic 
quantities  or  wealth,  for  the  very  same  reason  that  money  is.  It  is  clear  that 
if  a  person  had  his  pockets  full  of  promises  by  solvent  persons  to  render  him 
all  the  products  and  services  he  might  require,  he  would  be  exactly  as  w^ealthy 

1.61 


SILVER  AKD   l»RlCfiS. 


as  if  he  had  so  much  money  ?  And  he  can  always  sell  or  exchange  any  of 
these  orders  for  orders  for  a  different  thing.  Hence  we  see  the  perfect  justice 
of  the  doctrine  of  all  jurists  that  rights  are  wealth." 

TWENTY  YEARS    OF  PROGRESS. 

Consideration  of  these  economic  truths  will  show  how  preposterous  is  the 
idea  that  the  country  was  impoverished  and  the  course  of  its  progress  turned 
backward  by  the  formal  adoption  of  the  gold  standard  in  1873.  The  gain  in 
wealth  of  the  country  between  the  census  of  1870  and  that  of  1890  absolutely 
contradicts  that  assumption.  Between  1870  and  1890  the  population  of  New 
England  and  New  York  increased  31  per  cent.,  but  between  1873  and  1894  the 
number  of  depositors  in  savings  banks  increased  86  per  cent.,  and  the  amount 
of  their  deposits  increased  112  per  cent.  Between  1870  and  1890  the  popula- 
tion of  the  United  States  increased  62  percent.,  but  the  number  of  persons 
insured  in  life  companies  that  report  to  the  New  York  Insurance  Department 
increased  104  per  cent,  and  the  amount  of  their  policies  increased  113  per  cent. 
According  to  the  census  reports  the  true  valuation  of  all  real  and  personal 
property  in  the  United  States,  per  capita,  was  $780  in  1870,  $870  in  1880,  and 
$1,039  in  1890.  The  value  of  the  farms  in  the  six  States,  Illinois,  Iowa,  Minne 
sota,  Wisconsin,  Michigan  and  Missouri,  increased  64.6  per  cent,  between  1870 
and  1890,  and  deducting  the  population  of  towms  of  5,000  inhabitants  and  over, 
the  rest  of  the  population  in  those  States  increased  41.3  per  cent.  The  farm 
value  in  the  six  States,  North  and  South  Carolina,  Georgia,  Alabama,  Missis- 
sippi and  Louisiana,  increased  74  per  cent,  between  1870  and  1890,  and  the 
population,  including  cities,  increased  54  per  cent.  Valuations  in  1870  w^ere 
in  depreciated  currency.  From  1873  to  1893  the  increase  in  railroads  con- 
structed and  in  operation  in  the  United  States  was  107,488  miles  or  about  150 
per  cent. 

GARBLING  FACTS  AND  FIGURES. 

The  declaration  of  the  Chicago  platform  that  there  has  been  since  1873  a 
heavy  increase  in  the  burden  of  taxation  and  of  all  debts  is  a  gross  and  palpable 
misstatement.  The  public  debt  of  the  United  States  in  1873  was  equivalent  to 
a  charge  of  $50.52  on  every  man,  woman  and  child  in  the  country,  and  the 
annual  interest  paid  on  it  Was  equal  to  $2.35  per  head  of  the  population.  On 
July  1,  1895,  the  burden  of  the  debt  was  $12.93  and  of  the  interest  charge  42 
cents  per  head.  In  other  words,  the  reduction  of  the  debt  burden  per  head  of 
the  population  was  equal  to  74  per  cent,  and  of  the  interest  charge  81  per  cent. 

The  last  census  returns  give  copious  details  of  the  changes  in  all  forms  of 
public  debt,  national,  State  and  local,  between  1880  and  1890,  and  there  is  none 
of  the  great  divisions  of  the  country  in  which  there  was  not  a  marked  decrease 
in  these  ten  years,  both  in  the  average  rate  of  interest  and  in  the  amount  of  the 

1.62 


SILVER   AND    PRICES. 


annual  interest  charge  per  head  of  the  population.  The  results  for  the  whole 
country  as  to  all  forms  of  public  debt  were  briefly  these  :  During  the  ten  years 
ending  in  1890  the  total  national,  State  and  local  bonded  debt  increased  $872,- 
517,137  or  30.86  per  cent,  ;  the  total  interest  charge  decreased  $53,610,400,  or 
30.10  per  cent. ;  the  average  interest  rate  decreased  from  5.24  to  4.85  per  cent., 
and  the  per  capita  charge  decreased  from  $2.95  to  $1.51.  For  every  $1,000  of 
assessed  valuation  the  interest  charge  in  1880  was  $8.76  ;  in  1890  it  was  but 
$3.81. 

An  attempt  has  been  made  by  Senator  Tillman  and  others  to  break  the 
force  of  these  figures  by  arguing  that  the  progress  made  in  the  last  quarter  bf  a 
century  has  been  by  the  East  at  the  expense  of  the  West  and  South.  Among 
Tillman's  figures  are  these  :  "  There  are  fifteen  Southern  States,  including 
Delaware  and  Maryland,  with  an  area  of  566,000  square  miles  and  a  popula- 
tion of  17,000,000  in  1890.  The  State  of  Pennsylvania  has  an  area  of  45,000 
square  miles  and  a  population  of  5,258,000.  In  the  ten  years  between  1880  and 
1890  these  Southern  States  increased  in  population  2,555.000,  while  Pennsyl- 
vania increased  975,000  ;  but  in  the  assessed  valuation  of  its  real  and  and  per- 
sonal property  Pennsylvania  gained  $901,000,000,  while  the  fifteen  Southern 
States  gained  only  $909,000,000  "  This,  according  to  Tillman,  is  a  clear  case 
of  robbery,  a  demonstration  of  the  fact  that  the  substance  of  the  Southern  and 
Western  people  has  been  going  to  the  East  by  reason  of  the  financial  system 
that  has  been  fastened  on  them.  The  advantage  of  the  Southern  States  as 
compared  w|th  Pennsylvania  should  have  been  3^  times  to  1  instead  of  barely 
holding  their  own  with  it. 

It  is,  of  course,  pure  claptrap  to  institute  a  comparison  based  on  territory 
and  population  between  communities  with  a  history  and  environment  so  differ- 
ent as  those  of  the  States  of  the  cotton  belt  and  the  State  of  Pennsylvania,  but 
if  such  comparison  is  to-be  attempted  let  it  be  done  fairly.  The  census  returns 
supply  the  true  valuation  of  real  and  personal  property,  as  distinguished  from 
the  assessed  valuation  of  property  taxed,  in  the  various  States  and  Territories, 
and  if  there  is  to  be  any  discussion  of  the  relative  speed  of  national  progress  in 
the  various  sections  of  the  country  it  is  the  former  and  not  the  latter  tbat  must 
be  taken  as  the  basis  of  comparison.  In  the  fifteen  Southern  States  the  true  valu- 
ation of  real  and  personal  property  in  1880  was  $7,412,000,000,  while  in  1890  it 
was  $10,982,614,367— an  increase  of  $3,570,614  367  in  ten  years.  The  true 
valuation  of  real  and  personal  property  in  the  State  of  Pennsylvania  was  in 
1880  $4,942,000,000  and  in  1890  $6,190,746,550— a  gain  of  $1,248,746,550.  In 
other  words,  the  growth  in  wealth  of  the  fifteen  Southern  States  between  1880 
and  1890  was  equal  to  48  per  cent.,  while  that  of  Pennsylvania  was  only  25  per 
cent.  The  volume  of  growth  does  not  exactly  come  up  to  the  standard  of  3^ 
to  1  demanded  by  Tillman,  but  it  comes  pretty  near  it  ;  and  if  the  rate  of  the 
last  ten  years  is  kept  up  for  the  current  ten  the  wealth  of  the  Southern  States 

1.03 


SILVER  AND   PRICES. 


will  be  found  to  have  doubled  in  twenty  years,  while  that  of  Pennsylvania  will 
have  increased  only  one-half. 

FALSE   CLAIMS  TWICE   THKESHED. 

How  Utterly  untrustworthy  is  the  method  of  comparison  by  assessed  valua- 
tion may  be  inferred  by  an  examination  of  some  of  the  other  figures  cited  by 
Tillman  in  support  of  his  general  assertion  about  Southern  and  Western  pov- 
erty and  Eastern  wealth.  The  figures  have  done  duty  before,  being  the  basis 
of  a  similar  presentation  by  Mr.  King,  of  Kansas,  of  the  grievances  of  what 
he  calls  the  "produce  district,"  and  they  are  cited  by  Populists  like  Senator 
Allen  as  evidence  of  a  fixed  purpose  on  the  part  of  the  East  "  to  transfer  the 
wealth  of  the  West  from  the  pockets  of  those  who  produce  it  to  the  pockets 
of  those  who  have  had  no  hand  in  its  production  and  no  sympathy  with  its 
producers."  Mr.  King  selects  nine  States  from  the  "produce  district"  for 
comparison  with  the  State  of  Massachusetts,  and  Senator  Tillman  selects  six 
to  bring  out  substantially  the  same  result,  which  is,  that  while  the  single  State 
of  Massachusetts  gained  $569,000,000  in  assessed  valuation  in  ten  years,  the 
six  great  States  gained  but  a  few  millions  more.  But  in  point  of  fact,  while 
the  increase  of  true  valuation  in  the  State  of  Massachusetts  between  1880  and 
1890  was  very  little  over  $180,000,000,  the  increase  in  the  true  valuation  Of 
Illinois,  one  of  the  six  States  compared,  was  ten  times  this  amount. 

The  utter  absurdity  of  making  assessed  valuation  the  basis  of  a  comparison 
of  State  wealth  is  shown  by  looking  at  the  returns  from  Illinois.  According 
to  the  method  of  assessment  there  in  vogue  in  1880,  real  estate  and  improve- 
ments taxed  were  valued  at  $575,441,053  ;  according  to  the  method  of  1890 
the  valuation  was  $587,443,280.  That  the  value  of  taxable  real  estate  in  the 
State  of  Illinois  should  have  increased  in  ten  years  only  $12,000,000,  or  about 
one-fourth  of  the  average  annual  increase  of  the  taxable  real  estate  of  New 
York  City,  is  manifestly  ridiculous.  .  It  may  be  explained  by  the  fact  that  in 
1880  assessed  value  was  20  to  30  per  cent,  of  the  real  value,  while  in  1890  the 
standard  was  about  ten  per  cent . ;  but  if  this  renders  the  figures  absolutely 
worthless  when  applied  to  the  State  of  their  origin,  they  are  equally  so  as  a 
standard  of  comparison  with  States  where  a  different  system  prevails. 

WAGES   AND  COMMODITIES. 

The  course  of  wages,  elsewhere  treated,  is  the  most  unanswerable  de- 
monstration of  the  fallacy  of  the  free  silver  argument.  For  labor  is  the 
most  universal  of  all  commodities  and  the  one  that  nearly  everybody  has  to 
sell.  There  can  be  no  question  that  labor,  or  the  services  of  human  beings, 
can  command  more  gold  to-day  than  at  any  other  time  in  the  history  of  the 
world.  But  "if  gold  is  becoming  scarce,  why  should  labor  command  an 
increasing  share  of  it  ?"     Relatively  to  labor  there  has  been  a  fall  both  in 

1.64 


SILVER   AND   PRICES. 


gold  and  in  goods,  and  labor  commands  more  of  both  than  before.  The  rela- 
tion of  the  fall  in  silver  to  the  prices  of  commodities  is  very  clearly  brought 
out  in  the  elaborate  report  of  the  Senate  Finance  Committee,  usually  known 
as  the  Aldrich  report.  Here  is  traced  the  relative  value  of  labor  and  products 
in  gold  from  1845  to  1860,  and  from  that  time  to  1890 — taking  as  a  standard 
the  relation  between  labor  and  products  established  in  1860.  The  Senate 
report  gives  the  relative  purchasing  powder  of  silver  over  223  articles,  and  the 
variation  up  or  down  from  the  index  figure  of  ICO  indicates  whether  it  took 
more  or  less  money  to  buy  the  223  articles  than  in  1860.  The  facts  indicate 
that  goods  are  8  per  cent,  cheaper  than  in  1860,  compared  with  gold,  and 
silver  is  50  per  cent,  cheaper  than  in  1860  as  compared  with  gold.  It  now 
takes  31.20  ounces  of  silver  to  buy  one  ounce  of  gold,  while  in  1860  only 
15.29  ounces  would  buy  one  ounce  of  gold.  If  more  than  twice  as  much 
silver  is  needed  as  before  to  buy  one  ounce  of  gold  its  commercial  value  has 
evidently  fallen  fully  one-half.  But  according  to  the  silver  men  silver  has 
not  fallen  away  from  goods,  the  prices  of  commodities  having  kept  pace 
with  it  iu  its  downward  course.  In  every  way  this  has  been  shown  to  be  a 
palpable  misstatement.  The  tables  of  the  Senate  Committee  closed  with 
1890  and  showed  that  then  the  prices  of  223  articles  were  only  8  per  cent, 
cheaper  than  in  1860,  while  silver  was  over  50  per  cent,  cheaper.  A  com- 
parison with  the  prices  of  to-day  would  show  but  little  change  in  these 
relative  conditions.  The  following  condensed  table  from  the  Senate  report 
indicates  the  general  course  of  price  before  and  after  1860  in  the  chief  classes 
of  commodities,  in  wages  and  in  the  price  of  silver  bullion  : 


Prices,  Wages,  PurcMsing  Power. 


Meat 

other  food 

Cloths  and  clothiiif? 

Fuel  and  lighting 

Metals  and  implements 

Lumber  and  building  ma- 
terials      

Drugs  and  Chemicals 

House  furnishing 

Miscellaneous. 

Average  of  all  prices 

Average  of  all  wages 

Average  wages  by  import- 
ance  

Salaries  of  city  teachers  — 

Paper  money 

Gold  price  of  silver  bullion  in 
London 

E*urchasing  power  of  wages. 


1845 


79.4 
82.8 
97.1 

110.8 

106.7 

121 

102.3 

114.8 

102.8 


74.1 
100 


95.3 
84.4 


1850 


80.7 

91.3 

102.6 

114.8 

102.2 
123.6 
125.6 
107.7 
102.3 
92.7 

90.9 
83.8 
100 

97.3 
90.6 


1855 


104.7 
114.5 
94.7 
121.1 
117.8 

103.4 
129.2 
121.1 
115.2 
113.1 


97.5 
91.4 
100 

100 
86.6 


1860  1865 


100 
100 
100 
100 
100 

100 
100 
100 
100 
ICO 
100 

100 
100 
100 

100 
100 


1870 


197  174 

240.3  146.3 
299.2  1.39.4 
237.8  196.5 

191.4  127.8 


182.1 
271.6 
181.1 
202.8 
216.8 
143.1 

148.6 
134.7 
49.5 


148.3 
149.6 
121.6 
148.7 
112.3 
162.2 

167.1 
186.3 
81.1 

£8.2 
114.1 


1875 


140.4 

135 

120.1 

156.5 

117.5 

143.7 
144.2 
95 

122.9 
127.6 
158.4 

158 
188.1 


103.6 
116.9 
104.5 
100.2 
96.3 

130.9 
113.1 
85.2 
109.8 
106.9 
141.5 

H3 

182.8 
100 


92.2      84.7 
124.1    132.3 


1885 


107.6 
97.2 

84.8 
89.6 
77.4 


86.9 
70.1 
97.5 
93 
150.7 

155.9 
186.3 
100 

78.7 
162 


1890 


99.6 
103.5 
82.4 
92.5 
73.2 

123.7 
87.9 
C9.5 


158.9 

68.2 
86.3 
lOU 

77.4 


1.65 


SILVER   AND    PRICES. 


A  HIGH  PRICES  BARGAIN    STORE. 


The  absurdity  of  the  free  silver  claim  that  high  prices  in  themselves  make 
prosperity,  is  amusingly  satirized  in  the  following  burlesque  hand-bill  which 
has  recently  been  circulated  : 

GREAT  BARGAINS! 

.       PRICES   OF   ALL   GOODS      . 


ADVANCED    FIFTY    PER   CENT. 


The  Dearest  Store  in  Town 


Dry  Goods,   Clothing,  Hats,  Boots,  Groceries  and    Hardware 
at  Higher  Prices  than  ever  before. 


EVERYTHING    MARKED     UP, 


If  any  line  of  goods  is  too  cheap  for  our  customers,  a  discount 
of    ten  per  cent,  will  be  added. 


We  guarantee  that  articles  bought  from  us  will  cost  more  than 
the   same  quality  can  be  had  for  elsewhere. 


A  special  Lot  of  Women's  Hats,  Former  Price  $3.50,  Now  Going  at  $7.00. 
Best  Sugar — Sold  at  Other  Stores  for  6  cents  Per  Pound,  Our  Price  12  cents. 
One  Hundred  Suits  Boys'  Clothing,  Cost  $5.65  Each,  Sacrificed  at  Only  $12. 
Equally  Big  Advance  in  Price  of  All  Other  Goods  in  Stock. 


Come  Early  and  Avoid  the    Rush,  as   this   Unparalleled    Sale 
will  only  last   Two  Weeks. 

All  persons  who  prefer  to  buy  dear  goods,  and  who  favor   currency  schemes 
ior  raising  prices,  will  please  send  their  orders  to  the  firm  of 

STEWART,   BLAND,   ALTGELD, 
TELLER  &  CO., 

Dealers  in  Cheap  Monry  Notions,  High  Prices  Arguments, 
Free  Silver  Nostrums  and  Dear  Goods  Theories. 


■Weekly  Hard  Times  Hoivler.,  Pefterville,  Calamity  Co.  N.  G. 

1.66 


LABOR   AND    FREE    COINAGE. 

All  the  free  silver  arguments  as  to  the  general  fall  in  prices  and  the  advance  in  the  purchas- 
ing power  of  gold  sustain  the  conclusion  that  labor  has  benefited  from  the  process  of  which  the 
silver  men  complain.  For  the  average  rate  of  wages  has,  from  decade  to  decade,  steadily  ad- 
vanced, and  this  advance  has  been  accompanied  by  an  increase  in  their  purq^asing  power.  In 
silver  using  countries,  the  advance  of  wages  has  not  kept  pace  with  the  depreciation  of  silver, 
and  the  rise  in  price  of  all  the  necessities  of  life  has  been  much  greater  than  the  rise  in  wages. 
These  facts  are  clearly  understood  by  newspapers  which  speak  for  organized  labor,  and  by  the 
great  body  of  wage  earners  themselves. 

That  the  free  coinage  of  silver  might  benefit— until  he  had  to  borrow  again 
— the  debtor  who  is  looking  for  an  opportunity  to  repudiate  his  debts  no  one 
denies,  but  the  assertion  that  it  would  benefit  labor  has  yet  to  be  proved.  If 
there  be  a  creditor,  as  distinguished  from  a  debtor  class  it  is  composed  of  wage- 
earners.  They  have  an  interest,  distinctly  vital,  in  seeing  that  the  dollars  paid 
in  return  for  their  labor  do  not  shrink  in  purchasing  power.  As  Daniel  Web- 
ster said  in  the  Senate  of  the  United  States  sixty-two  years  ago:  "The 
very  man  of  all  others  who  has  the  deepest  interest  in  a  sound  currency, 
and  who  suffers  most  by  mischevious  legislation  in  money  matters,  is  the  man 
who  earns  his  daily  bread  by  his  daily  toil." 

What  the  working  man  wants  is  a  dollar  whose  purchasing  power  either 
remains  unimpaired  or  increases. 

This  he  now  has,  and  he  is  seriously  asked  to  exchange  it  for  one  which, 
though  almost  equally  hard  to  get,  will  yield  him  far  less  of  the  necessities 
and  comforts  of  life.  Herr  Schippel,  a  Socialist  member  of  the  German 
Reichstag,  aptly  describes  " this  artificial  forcing  up  of  the  cost  of  living" 
as  "the  most  infamous  robbery  one  could  now -a -days  undertake  against  the 
masses  who  work  for  wages."  Herr  Schippel's  remarks  are  not  too  positive. 
The  present  standard  of  wages  has  been  hardly  won.  It  has  emerged  from  a 
costly  history  of  suffering  and  struggle.  The  workingman  should  be  careful 
how  he  consents  to  any  proposition  for  lowering  it.  Once  sacrificed,  it  will  be 
hard  to  get  back. 

WAGES  IN   DEPRECIATED   CURRENCY. 

There  can  be  no  excuse  for  anybody  here  misapprehending  the  effect  of  a 
depreciated  currency  on  the  welfare  of  the  wage-earner.  The  generation  that 
lived  through  the  paper  money  period  and  felt  the  effect  on  w^ages  and  prices 
of  the  gradual  approach  to  and  final  redemption  of  specie  payments  has  not 
yet  passed  away.  In  the  report  of  the  Senate  Finance  Committee  in  1892-3  on 
wholesale  prices,  wages  and  transportation  there  is  the  most  complete  compila- 
tion of  wages  and  prices  which  has  been  made  in  this  or  any  other  country. 
The  comparative  course  of  both  between  1860  and  1890  is  an  object  lesson  in 
the  effect  of  the  kind  of  currency  used  to  pay  wages  on  their  purchasing 
power.     Taking  1860  as  the  starting  point,  at  which  the  average  of  prices  and 

1.67 


LABOR  AND   FREE  COINAGE. 


of  wages  and  the  purchasing  power  of  wages  are  alike  represented  by  the 
figure  100,  we  find  with  the  introduction  of  paper  money  a  sharp  and 
immediate  divergence  among  the  three  elements  of  the  prosperity  of  the 
wage  earner.  Prices  shot  rapidly  up,  wages  followed  at  a  greatly  relaxed 
pace,  and  the  purchasing  power  of  wages  went  down.  In  the  five  years 
between  1860  and  1865  the  average  of  prices  rose  from  the  index  number  of 
100  to  that  of  216.8,  while  wages  rose  from  100  to  only  143.1.  Thus  the  pur- 
chasing power  of  wages  declined  from  being  equal  to  100  in  1860  to  66  in 
1865.  With  the  appreciation  of  the  value  of  the  paper  dollar  between  1865 
and  1870  wages  did  not  decline.  On  the  contrary,  they  advanced  from  the 
equivalentof  143.1  to  162,  while  prices  fell  from  216.8  to  142.3.  Thus  the 
purchasing  power  of  wages,  which  was  only  equal  to  66  in  1865,  had  risen  with 
the  appreciation  in  value  of  the  currency  to  114.1  in  1870. 

Here  we  see  that  when  the  depreciation  in  the  currency  standard  caused  a 
rise  in  both  prices  and  wages,  prices  rose  so  much  faster  than  wages  that  the 
wage-earner  was  forced  to  work  for  less  and  less  every  year,  until  in  1865  he 
was  working  for  about  two-thirds  of  what  he  had  received  in  1860.  As  Mr. 
McVey  puts  the  case: 

"  Meanwhile,  the  contractor,  speculator  and  gambler  were  reaping  the 
benefits  supposed  to  be  inherent  in  such  a  money.  A  few  of  the  manufac- 
turers were  growing  rich,  and,  as  there  seemed  to  be  plenty  of  money  and 
apparent  high  wages,  the  idea  that  the  North  was  growing  rich  came  quite 
naturally.  In  reality  the  apparent  prosperity  was  in  large  measure  simply  a 
display,  in  lavish  use,  of  a  part  of  the  far  greater  sums  we  were  borrowing 
and  ever  since  have  been  paying,  and  the  diversion  to  showy  expenditure,  on 
the  part  of  the  wealthy  few,  of  a  pitifully  great  and  increasing  proportion  of 
what  ought  to  have  been  the  savings  of  the  poor.  The  fellows  on  top  made 
all  the  show  and  did  most  of  the  talking,  while  the  wage-earners  labored  on, 
hoping  for  better  things." 

Mr.  David  A.  Wells,  on  the  strength  of  painstaking  investigation,  asserts 
that  in  New  York  City  during  the  period  of  great  inflation  in  the  '60s  the 
prices  of  food  rose  90  per  cent.,  while  wages  rose  only  60  per  cent, 

AN  EXAMPLE  FROM   SOUTH  AMERICA. 

A  Methodist  missionary,  the  Rev.  J.  R  Wood,  of  Sparrow's  Point,  Md., 
who  spent  several  years  in  the  Argentine  Republic,  and  made  a  deep  study  of 
the  money  market  of  the  country  whose  banking  and  coinage  systems  changed 
several  times  during  his  residence  there,  makes  the  following  statement  in 
reference  to  the  effect  of  depreciation  in  the  currency  of  Argentina  : 

"  When  I  arrived  in  South  America,  Argentina  did  not  have  a  national 
banking  system,  but  every  province  and  state  had  its  own  banking  arrange- 
ments,   The  principal  coins  used  were  those  of  Bolivia  and  Chili,  worth  in 

1.68 


LABOR   AND    FREE    COINAGE. 


their  respective  countries  fifty  cents  and  one  dollar.  The  people  of  Argentina, 
liowever,  would  not  accept  them  for  more  than  their  bullion  value,  which 
was  thirty  six  and  seventy-tv/o  cents,  respectively. 

"Later  a  national  banking  system  was  adopted  similar  to  the  system  now 
in  use  in  this  country.  For  a  time  this  proved  successful,  but  through  bad 
management  and  a  general  tendency  on  the  part  of  the  officials  to  borrow  from 
Europe,  the  gold  reserve  w^as  tampered  with  and  a  silver  standard  was 
established. 

"The  paper  money  of  this  country  then  became  irredeemable.  A  panic 
followed.     The  price  of  every  commodity  advanced  from  100  to  300  per  cent. 

"  The  country  had  abundant  silver,  but  the  merchants  refused  to  handle 
it,  as  it  was  depreciating  daily.  The  wages  of  the  poor  man  did  not  increase 
with  the  increased  prices  of  goods,  and,  although  doing  the  same  amount  of 
work,  he  received  only  about  one- third  of  the  former  pay. 

"Being  a  missionary,  the  condition  of  the  poor  was  brought  more  point- 
edly to  my  notice  than  would  have  been  the  case  had  I  been  a  merchant.  I 
saw  great  suffering  among  those  who  had,  under  the  old  system,  been  able  to 
live  happily  on  the  same  salaries  for  which  they  were  working  at  the  time  of 
the  panic  in  the  money  market, 

' '  A  number  of  ladies  of  my  party  who  had  gone  to  the  Republic  to  teach 
in  the  normal  schools  at  $100  a  month  were  reduced  in  pay  to  one-third  of 
that  amount,  and  those  who  had  intended  to  return  to  the  United  States  were 
compelled  to  remain  in  the  country  on  account  of  the  money  panic.  When 
they  went  there,  the  Government  controlled  the  schools  and  always  paid  the  sala- 
ries in  gold,  but  when  the  silver  coinage  went  into  effect  the  same  salaries  were 
paid  in  silver.  "When  application  for  passage  was  made  at  the  steamship 
offices  the  price  was  quoted  in  gold,  and  if  silver  or  paper  was  tendered  a 
demand  for  three  times  the  amount  stated  was  made." 

WAGES  IN  HONEST  MONEY. 

In  this  country,  since  1865,  the  wage-earner  has  received  his  pay  in  money 
whose  purchasing  power  has  nearly  doubled,  while  profits  on  capital  average 
scarcely  half  what  they  were.  "With  such  a  history  and  such  an  experience  be- 
fore him,  he  must  be  a  foolish  man  indeed  who  desires  to  lower  the  quality  of 
our  money.  It  is  not  meant  to  suggest  that  the  wage  earner  should  be  satisfied,  or 
that  he  should  not  strive  for  even  a  greater  share  of  what,  in  co-operation  with 
3apital,  he  produces.  He  has  as  good  a  right  to  plan  and  combine  toward  that 
end  as  has  the  capitalist  to  increase  his  profits.  It  is  under  an  appreciating 
currency  that  so  much  has  been  accomplished.  Does  he  want  to  change  this 
experiment  for  the  one  which  immediately  preceded  it,  during  which,  after  the 
four  years  1862-65,  under  a  depreciating  currency,  he  found  himself,  though' 
with  nominally  high  wages,  working  for  two-thirds  the  power  to  purchase 
that  he  had_previously  had. 

1.69 


Labor  and  free  coinage. 


The  causes  of  the  enlianced  purchasing  po\Ner  of  money  since  the  early 
'70s  have  been  grossly  misrepresented  by  the  silver  party.  They  lay  it  to  the 
appreciation  of  gold.  Well-informed  people  know  it  is  due  rather  to  de- 
creased cost  of  production  and  distribution. 

Mr.  David  A.  Wells,  the  distinguished  economist,  shows  that  there  is  no 
evidence  that  gold  has  appreciated  in  value.  Not  a  single  commodity,  he  says, 
has  notedly  declined  in  the  last  thirty  years,  in  respect  to  which  clear,  abund- 
ant and  specific  evidence  cannot  be  adduced  in  proof  that  the  decline  has  been 
due  to  decreased  cost  of  production  or  distribution,  or  to  changes  in  supply 
and  demand  occasioned  by  fortuitous  circumstances.  Capital  has  been  abund- 
ant and  cheap  since  1873,  when  silver  was  demonetized.  Such  being  the  case, 
the  only  reason  why  sellers  have  taken  lower  prices  is  either  an  excessive  sup- 
ply or  a  diminished  demand.  Gold  is  cheaper  to  day  than  ever  if  we  measure 
its  value  either  by  the  price  of  labor  or  by  the  rate  of  interest.  According  to 
Mr.  Wells'  figures,  measured  by  wages,  gold,  if  we  accept  the  position  of  the 
silverites  that  it  has  altered  in  value,  has  declined  since  1873  in  a  ratio 
of  from  100  to  83;  measured  by  the  decline  in  the  rate  of  interest  on  gold 
paying  securities,  the  fall  of  gold  has  been  from  100  in  1870  to  75  in  1896. 

WHOSE   THE  BENEFIT? 

Who  will  benefit  by  free  coinage  of  silver  in  the  United  States  at  the  ratio 
of  16  to  1  ?  Dishonest  debtors  would.  The  owners  of  silver  bullion  also  would; 
temporarily  speculators  would  probably  make  something  too.  But  here  the 
enumeration  ceases.  No  working  men  would  be  benefited,  not  even 
the  mine  laborers  who  dig  the  ore,  for  it  is  not  probable  that  the 
mine  owner  would  voluntarily  increase  the  wages  of  the  mine-workers 
merely  because  the  government,  through  free  coinage,  increased  the  market 
for  the  mine  product.  Mine  owners  are  no  more  generous  than  any  other 
class  of  employers;  they  pay  no  more  than  current  rates  of  wages.  While 
the  Sherman  law  was  in  operation  and  the  price  of  silver  very  much 
higher  than  it  is  now,  the  wages  of  the  miners  were  not  increased  by  the 
mine  owners;  and  it  is  not  likely  that  they  would  be  increased  were  the 
price  of  silver  to  be  again  advanced  through  Government  aid.  Without 
the  bullion  to  take  to  the  mint  and  have  coined  free  into  dollars,  the 
laborer  can  have  no  share  in  whatever  benefits  free  coinage  may  create.  Not 
having  any  bullion  himself  how  can  he  get  any  of  the  dollars  which  are  coined 
free  for  the  bullion  owner,  is  the  question  which  he  wants  answered.  He  is 
told  that  he  will  get  them  in  payment  of  wages  for  his  labor,  but  as  only  a 
very  small  percentage  of  the  wage-earners  are  employed  in  silver  mines,  the 
bulk  of  the  wage-earning  population  would  not  receive  any  wages  from 
that  source.  Where,  then,  does  their  benefit  come  in?  What  the  mine 
workers,  as  well  as  the  farm  laborers  and  all  other  working  people  need  is 
not  a  change  in  the  existing  kinds  and  quality  of  money,  so  much  as  a  chance 

1.70 


LABOR   AND    FREE    COINAGE. 


to  get  more  of  the  money  now  in  use.  This  they  cannot  get"  as  long  as  em- 
ployers are  prevented  from  doing  business  through  fear  of  loss  on 
their  investments,  by  a  change  in  the  monetary  system.  Until  the  agitation  of 
the  money  question  has  ceased  and  confidence  in  business  circles  has  been  re- 
stored, any  change  in  the  present  condition  of  labor  and  business  is  improbable. 
The  vv^orking  men  have  studied  this  for  themselves,  and  but  few  of  them  are 
now  willing  to  accept  as  true  the  statement  of  interested  parties  that  wages  are 
low  because  gold  is  the  standard,  and  that  free  and  unlimited  coinage  of  silver 
will  produce  more  satisfactory  conditions  and  wages.  They  have  learned  that 
since  the  year  1860  wages  Inive  steadily  increased  ;  this  is  proved  by  the  follow 
ing  table  of  figures  compiled  from  the  census  reports  and  official  statistics  :— 

AVERAGE  YEARLY  WAGES  IN  THE   U.    S.    IN   MANUFACTURING   INDUSTRIES 
AS  SUOWN  BY  CENSUS  REPORTS. 


Year. 

Popnlation 

Employees. 

"Total  wages. 

Equivalent 
total  wages  in 

Average  An- 
nual wages  in 
gold. 

Wag'-s  iii- 

creased   since 

previous 

census. 

1860 
1870 
1880 
189  J 

31,44.3,321 
38,558,371 
50,1.55,733 
62,831,900 

1,311,246 
2,053,996 
2.732,595 
4,712,622 

$378,878,966 
775,.584,343 
947.9.53,795 

2,28:3,216,529 

$378,878,966 
674,421,168 
947,9.53,795 

2,2S3,21fi,529 

$288 
328 
347 
484 

14    per  cent 
39 

LABOR  UNIONS  AND  FREE  COINAGE. 

Every  member  of  a  union  sincerely  believes  that  the  present  standard  of 
wages  has  been  kept  up  by  means  of  labor  organizations;  therefore,  anything 
likely  to  destroy  the  usefulness  of  these  organizations  should  be  frowned  upon 
by  him.  Experience  has  shown  that  no  one  thing  has  done  so  much  to  injure 
labor  unions  as  their  perversion  to  the  purposes  of  partisan  politics.  The  his- 
tory of  the  growth  and  decay  of  the  Order  of  the  Knights  of  Labor  is  a  note- 
worthy illustration  of  this  fact.  The  present  political  campaign  will  soon  be 
over,  but  the  labor  unions  will  be  noede;i  in  years  to  come.  Will  it  pay  their 
members  to  allow  them  to  become  divided  and  weakened  in  the  attempt  to 
promote  the  schemes  of  silver  mine  owners  and  the  ambitions  of  the  candidates 
of  the  free  silver  party?  The  regard  of  these  men  for  the  laborer  will  sud- 
denly cool  on  the  evening  of  election  day,  and  the  disrupted  union  will  be  left 
to  take  care  of  itself.  Many  of  the  men  of  experience  in  the  labor  movement — 
those  who  are  recognized  as  leaders  among  their  fellow  toilers — see  clearly 
the  evil  effects  that  would  follow  the  participation  by  the  labor  unions  as  such 
in  political  campaigns,  and  are  outspoken  in  their  opposition  to  such  a  course. 
President  Samuel  Gompers,  of  the  American  Federation  of  Labor,  says:  "  The 
industrial  field  is  littered  with  more  corpses  of  organizations  destroyed  by  the 
damaging  influence  of  partisan  political  action  than  from  all  other  causes  com- 
bined." There  is,  however,  nothing  to  prevent  working  men  as  citizens  from 
taking  an  active  part  in  the  affairs  of  elections,  apart  from  their  connection 
with  labor  unions.    At  the  ballot  box  all  citizens— whatever  their  calling  in 

1.71 


LABOR   AKD    FKEE    COINAGK. 


life  may  be— are  on  a  footing  of  absolute  equality.  There,  at  least,  it  cannot 
be  urged  by  the  demagogue  that  any  '  class  distinction  "  exists.  How  to  vote 
so  as  to  best  advance  his  own  interests  and  those  of  his  fellow  men  is  the  one 
question  which  interests  the  working  man.  The  statement  made  by  the  silver 
party  that  the  working  men  as  a  whole  favor  free  coinage  is  not  only  insult- 
ing— it  is  absolutely  untrue.  As  a  matter  of  fact  many  men  prominent  in 
labor  circles,  who  enjoy  the  confidence  and  respect  of  their  associates,  have 
declared  that  they  will  vote  against  the  candidates  of  the  silver  party.  Others 
intend  to  do  so  but  don't  believe  in  talking  politics,  and  so  keep  their  intentions 
to  themselves.  Many  prominent  working  men,  both  in  and  outside  of  labor 
unions,  and  notably  the  employees  of  railroads,  have  arrayed  themselves  on  the 
side  of  sound  money.  Among  the  first  to  take  formal  and  practical  action  in  this 
direction  were  the  employees  of  the  Fitchburg  railroad  system.  Without  re- 
gard to  past  political  affiliations  these  workmen,  including  brakemen,  engi- 
neers, firemen,  conductors  and  other  employees,  formed  an  organization  which 
is  known  as  the  "  New  England  Railway  Men's  Non-Partisan  Sound  Money 
Club."  It  would  cover  too  much  space  to  enumerate  all  that  is  being  done 
for  sound  money  by  employees  of  other  railway  lines. 

Many  of  the  labor  papers  have  also  taken  a  stand  against  free  silver.  In 
the  Eight-Hour  Herald,  George  Gunton  says:  '"There  is  no  aspect  of  the 
case  in  which  wage- workers  have  anything  to  gain  by  the  adoption  of  a  silver 
standard,  but  they  have  everything  to  lose;  they  will  lose  in  the  value  of  all  their 
earnings;  they  willlose  in  the  purchasing  power  of  their  wages,  and  most  of 
all  they  will  lose  by  the  enforced  idleness  accompanying  the  business  disturb- 
ance and  bankruptcy  which  a  radical  depreciation  of  our  standard  money  would 
create."  The  Union  Record  sa,js:  "  The  silver  mine  owners  are  grinning  and 
letting  the  fools  do  the  shouting."  The  Scranton  Trwth  says:  "The  gold 
standard  is  the  financial  goal  for  which  every  great  nation  has  striven,  and  is 
the  dream  even  of  those  countries  that  are  now  on  a  silver  basis  and  harassed 
in  their  money  policy  by  the  fluctuations  of  the  white  metal."  The  Cleceland 
Citizen  says:  "Not  the  demonetization  of  silver,  but  the  use  of  labor 
saving  machinery  which  enables  one  man  and  sometimes  one  boy  to  do  the 
work  of  five  men  or  more,  has  caused  the  glut  of  idle  labor."  The  Pcopl? 
(Socialist)  asks:  "  Why  don't  the  farmers  have  the  price  of  wheat  fixed  by 
law,  as  they  raise  wheat  and  not  silver."  Many  other  statements  in  a  similar 
vein  might  be  quoted  from  different  labor  sources,  but  these  will  suffice  to 
disprove  the  assertion  so  frequently  made  by  the  free  coinage  advocates  that 
the  laboring  people  and  the  labor  press  are  opposed  to  the  gold  standard.  The 
position  taken  by  so  many  working  men  and  by  so  large  a  portion  of  the  labor 
press  against  the  Bryan  party  contradicts  the  assertion  that  the  present  cam- 
paign is  a  contest  between  working  men  and  their  employers,  the  people  and 
the  '  plutocrats,"  the  masses  and  the  "  classes."    No  such  divisions  exist,  ex- 


1.72 


LABOR   AND   FREE   COINAGE. 


cept  in  the  distorted  imaginations  of  the  free  silver  politicians  and  chronic 
radicals,  who,  although  unable  to  agree  among  themselves  as  to  what  they 
want,  are  proclaiming  their  intention  to  regulate  the  financial  system,  not  only 
of  America,  but  of  the  whole  civilized  world. 

THE  RAILROAD  MEN  AND  FREE  COINAGE. 

There  certainly  could  come  nothing  but  injury  through  the  adoption  of  a 
free  coinage  of  silver  policy  to  those  who  are  employed  in  departments 
of  business  whose  revenue  is  in  some  measure  regulated  by  the  laws 
of  the  State  or  nation.  Take  the  employees  of  steam  or  street  railway 
for  instance.  The  revenue  of  these  companies  comes  from  fares  paid  by  the  travel- 
ing public  and  from  freight.  In  some  States  the  fares  on  the  steam  railroads  are 
fixed  by  law  at  a  certain  amount  of  money  per  mile.  In  nearly  every  city  the  fares 
upon  the  street  railways  are  also  fixed  by  law.  Unlike  the  product  of  the  farm 
or  mine,  the  income  from  the  fares  could  not  possibly  be  increased  except  per 
haps  through  increased  travel.  According  to  the  free  silver  orators,  the  price 
of  all  commodities,  which,  of  course,  includes  the  material  used  in  carrying  on 
railroad  business,  would  be  increased.  As  many  of  the  railroads  now  claim  to 
be  making  no  profit — some  of  them  running  even  at  a  loss— how  would  it  be 
possible  for  them  to  exist  at  all  under  an  increased  cost  of  running,  except  in 
one  way :  to  reduce  expenses  in  whatever  direction  possible.  Much  of  the  bonded 
indebtedness  of  railroads  is  also  payable  in  gold.  As  gold  would  certainly  go  to  a 
premium  the  charges  on  this  account  would  be  materially  increased.  With  the 
expenses  of  insurance,  rents,  taxes,  etc.,  fixed,  the  cost  of  all  materials  fixed,  the 
only  department  of  the  business  in  which  retrenchment  is  possible  is  that  of 
labor.  These  reductions  would  be  surely  made,  and  it  would  be  useless  for 
the  workman  to  strike  or  in  any  of  the  usual  ways  try  to  prevent  these  re- 
ductions. He  would  either  have  to  submit  to  them  or  have  no  occupation  at 
all,  for  all  the  other  trades  and  industries  which  employ  labor,  and  which 
would  be  so  affected  by  the  change  in  the  financial  policy  that  the  working 
men  would  be  idle,  would  offer  no  possible  chance  for  discarded  railway 
employees  to  get  work  of  any  kind. 

THE  SILVER  ADVOCATES,  THEORISTS. — EXPERIENCE  AGAINST  THEM. 

There  is  certainly  nothing  in  the  experience  of  the  silver-using  countries  to 
encourage  the  American  wage-earner  to  believe  that  his  condition  would  be 
bettered  by  getting  down  to  their  level.  On  the  contrary,  they  furnish  pitiful 
object  lessons.  A  table  of  wages  paid  in  different  employments  in  some  of 
the  free-silver  countries  compared  with  wages  in  the  United  States  is  herewith 
submitted.  The  exhibit  speaks  for  itself.  The  figures,  so  far  as  foreign  coun- 
tries are  concerned,  have  been  taken  from  consular  reports,  and  those  in  the 
United  States  have  been  taken  from  the  report  of  the  Senate  committee  ap- 
pointed in  1893  for  the  purpose  of  obtaining  this  information  from  the  best 
sources  they  could 

1.73 


LABOR   AND   FREE   COINAGE. 


Trades  and  Occupations. 

CO 

< 

< 
189-2. 

$3.04 
1.14 
3.18 
1.14 
1.56 

8 
>< 

"A 

Bricklayers 

18'Jl. 

13118 
13.38 
31.00 
9.60 
33.10 

1894. 

110.00 
8  60 

10.80 
3.50 

4.35 

1884. 

$3.40 
1.90 
1.80 
1.20 
3.40 

1884. 

19.00 
5.40 

14.76 
4.90 
9.00 

1884. 

19.00 
4  63 

Hodcarriers 

Masons 

9  74 

Tenders  

8.81 

Plasterers 

9.40 

Slaters 

31.00 
17.30 
19.00 

18  20 

Roofers 

1.80 

8.40 

1.80 

.... 

8.70 

Pluipibers 

Assistants 

9  60 

Carpenters 

15.35 
11.90 

1.56 

7.60 
8.00 
5.50 
6.00 
6.00 
5.40 
10.00 
10.00 
5.00 
4.50 
7.35 

3.40 

■3.73 
3.04 

■  3.78 

1.68 

9.00 

"  8.60 
16.30 
13.80 
9.20 
30.00 
12.30 

9  84 

Gasfitters 

18.00 

Bakers 

13  00 

Blacksmiths 

Bookbinders  

16.03 

1.85 

13.83 
10  35 

Brickmakers 

9.16 

Brewers 

Butchers 

11.75 

Brass  founders 

3.00 

Cabinetmakers  

13.33 

'  2.88 
1.68 

14.76 
4.30 
7.50 
7.50 

14.45 

Confectioners 

10.38 

Cigarmakers 

13.50 

Coopers 

16.08 

Cutlers           ... 

Distillers 

4.00 
3.60 

3.60 
3.00 
3.16 
3.66 
3.90 
5.10 
3.75 
4.15 
3.90 
3.30 
5.76 
5.76 
3.60 
3.95 
9.00 

1.35 

1.75 

■  3.40 

1.48 
3.84 
1.68 
6.30 
1.93 

'  3.50 

3.50 

7.40 

'5.00 
9.00 

13.50 

Draymen  and  teamsters  . 

10.80 

1.50 

Drivers. — 
Cab  and  carriage  

Street  car 

8.50 

Dyers 

9.00 

10.00 

Furriers. 

13.00 

Gardeners 

13.50 



6.50 

Hatters 

Horseshoers  . .       .        

Jewelers  

13.90 
3.50 

Laborers,  porters,  etc 

Millwrights 

Printers 

Potters 

8.88 
16.80 
16.43 

1.14 

1.75 

1.80 

7.85 

1.93 
3.00 

9.43 

13.00 

Sailmakers                          

.... 

14.00 

Shoemakers        .         

3.84 

'  4.93 

10.00 

Stevedores  ... 

■  3.18 

Stonecutters 

31.00 

Tanners                       .         

3.00 

7.14 

11.50 

7.50 

3.84 
3.88 

'  1.93 

4.92 

4.93 

13.10 

7.50 

13.00 

Tailors         

3.95 

12.50 

Telegraph  operators 

Tinsmiths 

14.35 

11.38 
14.00 

1.74 


LABOR   AND   FREE   COINAGE. 


JAPAN  AS  AN  EXAMPLE. 

Japan  has  passed  through  a  great  political  and  industrial  revolution 
of  late  years,  and  is  now  reaping  some  of  the  advantages  of  her  emancipa- 
tion from  old  limitations  and  restrictions.  Manufacturing  has  received  a 
tremendous  impetus,  and  the  prices  of  all  commodities  have  advanced. 
But  wages  have  not  advanced  so  rapidly  nor  so  much  as  prices.  In 
1891  the  carpenter  received  15.5  cents  (28  sen  and  1  p.)  per  day,  while 
in  1894  he  received  17.25  cents  (31  sen  and  6  p.)  per  day — a  gain  of  11.3 
per  cent,  in  four  years.  If  data  could  be  secured  for  1889  the  advance 
would  be  still  greater.  The  wages  of  the  pottery  maker,  tea  maker,  foreign 
dressmaker,  and  the  cotton  spinner  have  advanced  the  most.  The  percentage 
of  gain  in  the  wages  of  the  carpenter,  painter,  sower,  farmer,  and  coolie  have 
been  11  1-3, 11  1-9,  10  2-3  per  cent,  respectively  for  the  four  years.  Policemen 
get  from  $4.50  to  $8.25  per  month;  teachers  in  government  primary  positions 
from  $6.50  to  $19  per'month;  clerks  in  post-offices,  custom  house  offices  and 
similar  positions  receive  from  $4.50  to  $33  per  month;  teachers  in  boys'  high 
schools,  from  $8  to  $40  per  month.  These  salaries  are  reduced  to  the  basis  of 
our  own  money.  But  food  products  have  risen  faster  than  wages.  This  is 
especially  true  of  rice,  beans  and  wheat,  the  principal  food  staples  of  Japan. 
The  increase  in  wages  has  been  something  like  14  per  cent,  throughout  the 
country,  while  the  advance  of  the  principal  staples  has  been  28  per  cent 
Since  1889  rice,  the  principal  article  of  food,  has  gone  up  62  per  cent.,  while 
wheat  and  beans  have  each  increased  36  and  89  per  cent,  in  their  price. 

THE   CASE   OF  CHINA. 

Since  there  has  been  no  great  influx  of  silver  into  China,  there  has  been 
little  chance  of  any  great  change  in  the  purchasing  power  of  her  silver  money. 
Although  wages,  rent  and  taxes  remain  unaltered,  still  gold  will  buy  more 
than  it  would  before.  In  1893  four  shillings  in  gold  would  buy  what  it  for- 
merly took  6s.  6d.  to  purchase.  In  other  words,  $60  in  gold  will  do  what 
formerly  required  $100.  Gold,  however,  is  used  in  payment  for  imports, 
while  silver  and  copper  remain  the  money  of  the  people.  Wages  are  very 
low,  skilled  workmen  only  getting  from  10  to  30  cents  per  day,  while  unskilled 
laborers  sell  their  strength  for  5  to  10  cents  per  day  (as  computed  in  silver). 
In  the  case  of  China  the  depreciation  of  silver  has  had,  therefore,  but  little 
effect  upon  her  masses.  But  it  has  not  raised  the  nominal  remuneration  of 
wage- earners. 

THE  EXPERIENCE   OF  INDIA. 

India's  development  has  tended  to  raise  local  prices.  But  notwithstanding 
this,  she  has  suffered  grievously  by  the  depreciation  of  silver.  Our  silver 
advocates  cannot  deny  that  wages  have  fallen  and  prices  risen  in  such  a  way 

U5  •-^^>^ 

4>  "    0»  THS        -^ 


\ 


fJHIVBESITT! 


LABOR   AND   FREE   COINAGE. 


as  to  make  the  burden  of  her  laboring  classes  greater  than  ever  before. 
The  Indian  Commission,  in  its  report  for  1892,  says  on  page  462:  '*  The  fact 
that  wages  and  all  prices  do  not  rise  to  the  same  extent  enables  the  producer 
of  tea,  for  instance,  to  make  a  temporary  gain  at  the  expense  of  employees  and 
of  those  to  whom  he  has  to  make  fixed  money  payments.  This  profit  is 
usually  only  temporary,  since,  with  the  depreciation  of  the  standard,  all 
wages  and  prices  tend  to  rise,  and  when  the  rise  is  completed  the  profit  disap- 
pears. If  the  profit  should  happen  to  be  considerable,  and  should  last  a  long 
time,  it  supplies  an  unnatural  and  temporary  stimulus  to  trade  which  leads  to 
overproduction  and  consequent  reaction." 

It  is  measurably  true  in  India,  as  everywhere  else,  that  wages  and  prices 
tend  in  the  long  run  to  adjust  themselves  to  each  other.  But  what  is  the 
immediate  consequence?  Given,  as  in  India,  the  case  of  a  depreciating  stand- 
ard, and  who  suffers  during  the  years  or  decades  of  adjustment?  The  result 
proves  to  be  the  same  here  as  elsewhere.    It  is  labor  that  pays  for  the  changes. 

In  this  connection  the  recently  announced  opinion  of  the  Government  of 
India  will  be  found  interesting:  "1.  That  a  country,  as  a  whole,  makes  no 
gain  in  its  international  trade  by  a  depreciation  of  its  standard,  since  the  extra 
price  received  for  its  exports  is  balanced  by  the  extra  price  paid  for  its 
imports.  2.  That  the  producer  of  an  article  of  export  may  make  a  temporary 
and  unfair  gain  from  depreciation  of  the  standard,  at  the  expense  of  his 
employees  and  of  other  persons  to  whom  he  makes  fixed  payments.  3.  But 
that  this  gain,  while  not  permanent,  is  counterbalanced  by  a  tendency  to  over- 
production and  consequent  reaction  and  depression,  b}'^  a  liability  to  sudden 
falls  in  prices  as  well  as  to  rises,  and  by  the  check  to  the  general  increase  of 
international  trade  which  necessarily  results  from  the  want  of  a  common 
standard  of  value  between  countries  which  have  intimate  commercial  and 
financial  relations." 

LABOR  IN  MEXICO. 

The  conditions  of  labor  in  Mexico,  as  set  forth  in  the  reports  of  foreign 
diplomatic  oificers  and  consuls  living  in  that  country,  do  not  present  a  very 
attractive  situation  for  workingmen  to  anticipate.  Free  coinage  of  silver 
amongst  our  neighbors  across  the  Rio  Grande  has  not  brought  any  advantage 
to  workingmen.  Wages  are  low,  while  prices  of  the  necessaries  of  life  are 
abnormally  high.  It  is  difficult  to  maintain  a  respectable  standard  of  exist- 
ence. 

"  Labor  is  very  cheap  and  abundant  in  Mexico,"  says  Consul  Gorman,  of 
Matamoras,  under  date  of  January  1st,  1895,  "  the  average  farm  laborer 
receiving  $6  a  month,  sometimes  with  rations  of  corn  only.  This  is  equiv- 
alent, at  present  rates  of  exchange,  to  about  10  cents  a  day  iu  American 
money." 

The  British  Consul  at  the  City  of  Mexico,  in  his  report  of  December  5th, 

1.76 


LABOR   AND    FREE    COINAGE. 

1895,  gives  the  rates  of  wages  at  a  number  of  principal  points.     In  the  state  of 
Sonora,  Northern  Mexico,  they  are,  in  Mexican  currency,  per  day  : 

Common  laborers 37  to  75  cents 

Miners 50c.  to  S3  00 

Factory  hands  (men) 75c.  to    2  00 

Artisans •     $150  to    5  00 

Substantially  the  same  rates  prevail  in  the  southern  part  of  Lower  Califor- 
nia. At  Mazatlan,  an  important  port  on  the  Pacific  coast,  with  three  cotton 
factories,  a  soap  factory  and  a  number  of  small  sugar  mills  and  distilleries. 

Common  laborers  receive 25  to  62  cents  per  day 

Miners U  00  to  86  00 

Factoryhands 62c.    to    3  00 

Artisans $1  00  to    3  00 

The  above  rates  must  be  cut  down  nearly  one-half  to  reduce  them  to 
United  States  equivalents,  but  even  making  this  reduction  the  wages  of 
skilled  labor  would  seem  to  be  comparatively  high.  This  condition  is  attrib- 
utable to  the  relative  scarcity  of  skilled  labor,  a  fact  which  also  explains  why 
wages  paid  to  conductors,  engineers,  firemen  and  brakeraen  on  Mexican  rail- 
roads are  also  comparatively  high.  Few  Mexicans  are  qualified  for  this 
work,  and  so  trainmen  have  to  be  imported  from  the  United  States  and  be 
given  an  extra  inducement  to  come. 

The  so  called  "  flush  times  "  in  Mexico  are  not  at  all  due  to  free  silver,  but 
rather  an  iacident  to  the  early  stages  of  industrial  development.  Her  skilled 
labor,  her  capital  and  her  enterprise  are  drawn  from  other  lands,  chiefly  our 
own  country.  She  also  produces  certain  raw  materials  which  can  be  profit- 
ably marketed  abroad  for  gold. 

Behind  all  this  nascent  industrial  development  stands  the  unanswerable 
fact  that  the  great  bulk  of  her  agricultural  population  is  poor  and  common 
labor  is  wretchedly  remunerated. 

"  So  far  from  being  an  example  of  the  blessings  of  free  silver,  Mexico  is 
perhaps  the  most  convincing  illustration  among  all  the  silver  using  countries 
of  the  inequalities  and  retarding  influences  of  a  fluctuating  currency." 

There  is  the  same  difference  in  prices.  Flour  in  Mexico  was  quoted  at 
53^^  cents  per  pound;  sugar,  19  cents;  coffee,  24  cents;  beans,  per  peck,  50 
cents;  rice,  S}4  cents.  In  the  United  States  the  prices  of  these  commodities 
are  much  less.  Prices  have  risen  in  Mexico  as  well  as  wages,  and,  as  usual, 
prices  have  advanced  much  faster  than  wages. 

THE  SAVINGS  OF  THE  PEOPLE. 

It  is  absurd  to  assume  that  the  wage  earners  of  our  own  country  can  profit 
under  conditions  which  have  brought  hardship  everywhere  else.    Nor  should 

1.77 


LABOR   AND    FREE    COINAGE. 


it  need  any  demonstration  to  prove  that  those  of  them  who  have  been  able  to 
save  money  vt^ould  be  very  much  worse  off  under  a  debased  currency.  Last 
year  there  were  in  the  United  States  4,875,519  depositors  in  savings  banks,  to 
whom  there  was  due  |1, 810,597, 023,  which  is  vahiable  only  for  its  purchasing 
power.  To  the  depositors  it  does  not  matter  whether  one-half  their  funds  be 
embezzled  and  prices  remain  unchanged,  or  the  sum  remain  intact  and  prices 
be  doubled.  The  adoption  of  the  silver  standard  would  reduce  by  one-half 
the  amount  of  provision  made  for  the  future  by  the  depositors,  who  are  mostly 
people  of  small  means  and  largely  wage-earners.  The  savings  banks  that  have 
received  gold  would  pay  out  silver,  because  they  could  not  help  themselves 
even  if  Ihey  desired  to;  the  deposits  are  not  in  their  vaults  in  the  foiTU  in 
which  it  was  deposited;  they  have  been  loaned  in  great  measure  to  men  and 
corporations  of  wealth,  who  have  borrowed  gold  and  would  pay  back  silver  and 
get  rich  by  Ihe  operation;  the  banks  could  only  pay  the  depositors  what  they 
could  collect  from  those  to  whom  they  have  loaned  money,  and  the  loss  would 
fall  on  the  depositors. 

A  well  known  Savings  Bank  President  gives  the  following  lucid  explana- 
tion of  the  effect  of  the  free  coinage  of  silver  at  a  ratio  of  16  to  1,  upon  sav- 
ings deposits  : 

"  Manifestly  the  free  coinage  of  silver  would  work  evil  to  the  man  who 
has  by  dint  of  hard  labor  and  economy  scraped  together  a  few  hundred  or  a 
few  thousand  dollars  and  placed  it  in  one  of  the  2,000  or  more  savings  banks 
in  this  country.  Every  one  of  those  4,000,000  depositors  is  a  capitalist,  for 
the  man  who  has  50  cents  in  a  bank  and  all  his  debts  paid  is  a  capitalist  to 
that  extent,  just  as  is  the  man  whose  deposit  reaches  to  hundreds  or  thousands 
They  represent  the  thrifty  laboring  people— the  small  storekeepers,  the  clerks, 
the  artizans  and  the  day  laborers.  The  Chicago  platform  is  an  admitted 
attack  on  capital,  inspired  by  the  debtor  class.  The  free  silver  agitators  would 
lead  the  people  to  believe  that  it  is  aimed  at  the  capitalists  with  millions,  but 
as  the  capitalist  with  a  million  would  be  affected  by  free  silver,  so  would  a 
capitalist  with  but  $10  in  the  savings  bank.  The  free  coinage  of  silver  would 
be  a  blow  to  the  4,000,000  of  thrifty  persons  who  have  deposited  in  the 
savings  banks  of  the  country  almost  two  billions  of  dollars.     Why  ? 

"  The  depositors  in  the  saving  banks  are,  for  the  most  part,  men  and 
women  who  have  worked  hard  to  gather  together  a  little  money  for  a  rainy 
day.  This  they  have  deposited  in  the  savings  banks  at  a  time  when  every  dol- 
lar was  worth  100  cents  in  gold  coin,  because  the  Government  stands  ready  to 
redeem  every  dollar  in  silver  with  one  in  gold.  Suppose  we  should  have  free 
coinage.  Gold  certainly  would  not  circulate  if  it  were  undervalued  by  the 
coinage  of  silver  at  a  ratio  of  16  to  1.  A  given  weight  of  gold,  as  is  known, 
is,  in  the  market  to-day,  worth  over  thirty  times  as  much  as  an  equal  weight 
of  silver.     Consequently,  as  past  experience  has  proved,  it  would  either  go  out 


1 


1.78 


LABOR   AND   FREE   COINAGE. 


\)f  the  country  or  be  hoarded.  We  would  quickly  slide  to  a  silver  basis,  like 
China,  Japan  or  India.  Gold  would  go  to  a  premium.  A  silver  dollar  would 
be  worth  just  what  the  bullion  in  it  is  worth  in  the  market — about  53  cents  in 
our  money  to-day.  So  the  thrifty  people  who  deposited  dollars  in  the  savings 
banks  w  hen  we  were  on  a  sound  financial  basis  would,  under  free  coinage, 
have  their  deposits  dwindle  to  about  one-half  their  value.  Every  dollar  of 
interest  that  they  would  draw  would  be  worth  but  53  cents,  according  to  our 
standard  to-day.  They  would  receive  a  coin  called  one  silver  dollar,  but 
worth  no  more  than  the  bullion  in'  it,  or  53  cents  under  our  present  currency 
system, 

"I  know  that  the  majority  of  the  officers  of  savings  banks  all  over  this 
country  agree  with  me  in  my  views.  Whether  the  depositors  realize  the  con- 
dition that  confronts  them,  I  do  not  know.  But  such  a  condition  does 
confront  them.  The  Chicago  platform  is  an  attack  on  their  savings ;  it  is  a 
conspiracy  against  thrift.  In  considering  the  matter  I  have  left  out  entirely 
the  possibility  of  violent  business  disruption  and  depression.  I  think  every 
savings  bank  depositor  will  see  how  his  savings  must  shrink  in  value  by  reason 
of  the  inflation.  That  alone  should  bring  him  into  the  fight  for  honest 
money." 

A  million  and  three-quarters  of  people  are  shareholders  in  building  and 
loan  associations;  nearly  three-fourths  of  them  are  creditors,  and  a  littk  more 
than  one-fourth  have  borrowed  the  assets  of  the  associations,  amounting  to 
$450,000,000  on  the  gold  standard.  On  the  silver  standard  they  would  repay 
the  equivalent  of  $235,000,000  of  gold  and  pocket  the  difference,  the  loss  fall- 
ing on  the  shareholders  who  had  not  borrowed  The  life  insurance  companies 
doing  business  in  the  State  of  New  York,  owed  two  years  ago  $1,763,730,015 
on  1,268,408  policies.  The  doubling  of  prices  that  would  result  from  the 
introduction  of  the  cheap  dollar  would  reduce  the  provision  made  for  widows 
and  orphans  about  one  half ,  and  the  other  half  would  not  be  appropriated 
by  the  companies,  whose  funds  are  loaned  out;  it  would  be  made  by  the 
capitalists  who  have  borrowed  gold  dollars  and  would  repay  silver  dollars 
Many  foreign-born  workingmen  annually  make  considerable  remittances  to 
their  less  fortunate  relatives  abroad.  Are  they  prepared  to  pay  $9.80  for  a 
pound  sterling  instead  of  $4.90  as  now  ?  What  wouM  be  the  sense  of  voting 
to  bring  about  a  condition  where  they  would  pay  forty-eight  cents  for  a  Ger- 
man mark,  and  fifty  cents  for  a  French,  Belgian  or  Swiss  franc  or  an  Italian 
lira,  instead  of  the  half  of  these  sums  under  our  present  gold  standard  ? 
These  things  would  inevitably  happen  under  a  free  silver  regime.  We  may 
debase  our  dollar,  but  we  have  no  power  over  the  pound  sterling,  the  mark, 
the  franc,  the  lira.  If  we  choose  to  put  ourselves  in  a  position  where,  if  we 
wish  to  buy  foreign  exchange  or  currency,  we  must  pay  double  for  it,  that  is 
our  affair,  but  a  very  stupid  and  unprofitable  affair. 

1.79 


LABOR   AND    FREE   COINAGE. 


I 


There  is  no  conceivable  part  of  the  process  of  reducing  the  currency  of 
the  country  to  a  silver  basis  that  would  bring  any  benefit  to  the  wage-earner, 
and  there  is  an  absolute  certainty  that  it  could  bring  to  him,  on  the  whole, 
nothing  but  loss. 

"the  masses  and  the  classes." 

A  diabolical  attempt  is  being  made  to  stir  up  social  strife  by  telling  work 
iDgmen  that  in  this  campaign  the  classes  are  arrayed  against  the  masses.  The 
argument  is  presented  to  them  somewhat  as  follows:. 

The  great  oppressive  forces  against  labor  are  the  moneyed  interests.  Cap- 
italists seek  to  get  all  they  can  out  of  labor  and  pay  just  as  little  as  possible  in 
return.  The  interests  of  capital  and  labor  are  and  must  be  antagonistic. 
When  there  is  such  an  unanimity  of  opinion  amongst  owners  of  capital  as  to 
the  undesirability  of  the  free  coinage  of  silver,  it  is  pretty  safe  to  suppose  that 
the  working-man's  interest  lies  in  espousing  the  cause. 

This  argument  is  often  effective  to  unthinking  minds.  The  best  way  to 
dislodge  it  is  to  explain  the  mutuality  of  interests  in  modern  industrial 
society.  An  editorial  writer  in  the  Baltimore  Sun  gives  the  following  interest 
ing  resume  of  the  relations  in  which  the  members  of  a  modern  industrial 
community  like,  the  United  States  stand  to  one  another: 

"  The  state  of  such  a  community  is  best  when  wages  are  good,  employ- 
ment general  and  easy  to  secure,  prices  reasonable,  and  profits  fair  and 
reasonably  certain.  It  is  impossible  to  disturb  any  one  of  these  factors  with- 
out disturbing  the  others.  If  wages  are  reduced  or  employment  becomes  too 
limited,  it  results  in  forcing  those  who  labor  to  a  less  independent  and  com- 
fortable existence.  But  this  is  not  all:  the  laborers  of  every  kind  constitute 
the  great  customers  of  the  farmers,  merchants,  manufactvirers  and  common 
carriers.  Counting  together  those  few  in  the  United  States  who  do  not  labor 
at  all  and  those  who  work  but  do  not  do  manual  labor,  their  custom,  or 
patronage,  is  small  when  compared  with  that  of  the  vast  multitude  of  labor- 
ing people.  Any  merchant  or  manufacturer  or  railroad  officer  knows  this; 
any  farmer  should  know  it. 

>  "  It  follows  that  whatever  lowers  the  scale  of  living  amongst  laborers  tends 
to  force  down  prices  and  diminishs  the  profits  of  farmers,  merchants,  manu- 
facturers and  common  carriers.  This  it  does  directly.  But  it  also  acts 
indirectly.  The  laborers,  to  a  very  large  extent,  own  the  capital  of  thfe 
country.  They  are  the  principal  owners  of  the  money  deposited  in  savings 
banks  or  in  beneficial  and  other  societies— a  very  large  proportion  of  the 
capital  of  the  country.  This  capital  is,  directly  or  indirectly,  invested  in 
enterprises.  To  depress  wages  reduces  these  savings  and  curtails  industrial 
enterprises,  thus  reacting  to  further  injure  labor  and  acting  to  diminish  or 
prevent  profits.    Whatever  depresses  prices  unreasonably,  reduces  or  destroys 

1.80 


LABOR   AND    FREE   COINAGE. 


profits,  and  thus  paralyzes  enterprise,  and  this,  while  it  directly  injures 
farmers,  merchants  and  manufacturers,  indirectly  injures  labor  by  lessening 
wages  and  the  opportunities  for  employment.  Whatever  makes  profits  uncer- 
tain does  the  same  thing. 

"  Thus  it  is  that  the  industrial  fabric  of  modern  society  ties  us  all  together 
— we  are  children  of  one  household — and  what  injures  one  injures  another. 
Nobody  is  exempt  from  its  risks.  The  few  very  rich  who  can  live  without 
work  suffer  in  their  incomes  when  the  poorest  suffer  in  their  wages. 

"  Such  being  the  structure  of  the  social  fabric,  what  sense  is  there  in  one 
part  warring  on  another  ?  There  can  be  "but  one  end  to  such  wars— all  must 
suffer.  Whoever  strikes  another  strikes  himself.  It  is  not  to  be  denied  that 
there  is  at  least  an  apparent  antagonism  between  some  of  these  elements.  To 
reduce  wages  too  low  may  at  times  and  places  increase  profits;  but,  as  has 
been  seen,  this  injures  the  greatest  customer  and  competition  will  soon  lower 
profits  thus  secured.  To  inveigh  against  wealth  or  property  or  reasonable 
profits  frightens  capital,  hampers  enterprise  and  restricts  employment.  Devil- 
ish ingenuity  could  contrive  no  better  way  to  disturb  the  industrial  life  of  the 
people  than  by  agitating  for  the  debasement  of  our  money.  This  agitation 
destroys  confidence  in  the  future,  thus  paralyzing  enterprise  and  restricting 
opportunities  for  employment,  and  it  threatens  the  direct  lowering  of  wages. 
Met  by  overwhelming  opposition,  it  now  tries  to  do  the  next  worse  tiling  it 
can  by  inciting  indiscriminate  hostility  against  those  whose  social  function  it 
is  to  plan  and  venture  on  new  enterprises. 

"  The  prosperity  of  the  farmer  depends  upon  the  prosperity  of  the  laboring 
public,  and  this  in  turn  depends  upon  the  sjate  of  industrial  enterprise.  By 
attacking  capital  and  property  one  aids  in  the  creation  of  alarm  and  un- 
certainty and  frightens  enterprise." 


1.81 


PROTECTION  THE  PARENT  OF  NATIONAL 
DISASTER. 

The  free  silver  movement  is  essentially  a  protective  movement,  for  just  as  protection  by 
a  tariif  is  designed  to  interfere  witti  tlie  freedom  to  purchase  goods,  so  the  opening  of  the 
miiits  to  the  free  coinage  of  silver  is  designed  to  compel  people  to  take  a  kind  of  dollar 
which  they  do  not  want.  The  financial  troubles  through  which  the  country  has  been  pass- 
ing began  with  the  tariff  revision  of  1890,  and  the  extravagant  approiniations  of  the  Fifty- 
socoiid  Congress.  Both  contributed  to  weaken  the  Treasury  and  leave  it  at  the  end  of  two 
years  practically  without  resources.  Populism  is  a  natural  evolution  of  protectionism  ;  both 
mean  Government  paternalism,  and  both  are  thus  radically  opposed  to  the  principles  of  true 
Democracy, 

The  platform  of  the  National  Democracy  declares  that  the  demand  of  the 
Republican  party  for  an  increase  in  tariff  taxation  has  its  pretext  in  the  defici- 
ency of  revenue,  which  has  its  cause  in  the  stagnation  of  trade  and  reduced 
consumption  due  entirely  to  the  loss  of  confidence  that  has  followed  the  Popu- 
list throat  of  free  coinage  and  depreciation  of  our  money  and  the  Republican 
practice  of  extravagant  appropriations  beyond  the  needs  of  the  Government.  It 
is  the  favorite  claim  of  Republican  orators  that  the  high-water  mark  of  pros- 
perity was  reached  during  the  last  Republican  a*!  ministration  and  that  all  the 
subsequent  depression  has  been  due  to  the  accession  of  a  Democratic  admin 
istration  to  power  in  1893,  and  to  the  legislation  for  a  reduction  of  tariff  duties 
which  followed  it.  But,  as  has  been  asked,  is  it  not  more  credible  that  the 
great  disaster  which  came  upon  us  wa  s  the  outgrowth  of  a  false  system  of 
economy  which,  with  all  our  matchless  resources,  we  were  unable  to  longer 
stand  ?  Will  not  future  generations,  when  they  look  back  to  our  times  to  draw 
lessons  of  wisdom  to  guide  them  in  the  direction  in  which  they  should  go, 
rather  ascribe  our  reverses  to  our  follies  instead  of  our  fears  ?  Are  the  advo- 
cates of  a  restrictive  policy  ready  to  confess  that  nothwithstanding  our 
unparalleled  resources,  thirty  years  of  protection  had  failed  to  establish  our 
industries  upon  a  foundation  sufficiently  firm  to  withstand  even  a  proposition 
looking  to  a  conservative  modification  of  its  structure  ? 

It  is  matter  of  record  thUt  the  protective  system  has  been  a  fruitful  source 
of  commercial  failures,  of  conflicts  between  employees  and  employed  and  of 
popular  discontent  generally.  From  1873  to  1882,  inclusive,  the  number  of 
failures  was  74.978,  with  liabilities  aggregating  $1,648,310,517.  From  1883  to 
1890  we  were  constantly  on  the  verge  of  a  financial  crash.  The  Secretary  of  the 
Treasury  was  continually  forced  to  purchase  bonds  and  repay  interest  to  check 
the  alarm.  With  all,  however,  that  could  be  done,  we  had  the  stringency  of 
1883,  the  panics  of  1884  and  1890.  The  number  of  failures  during  this  period, 
includmg  the  years  1883  and   1890,  exceeded  82,000,  with  liabilities  of  more 

1.82 


PROTECTION   THE    PARENT    OP   NATIONAL    DISASTER. 

than  $1,250,000,000.  The  failures,  which  numbered  6,738  in  1882,  rose  to 
9,184  in  1883,  and  10,907  in  1890,  xvith  liabilities  aggregating  $189,856,964. 
Not  since  the  tariff  revision  of  1883  went  into  effect  has  the  number  of  failures 
fallen  below  9,000  in  a  single  year.  .  During  this  period  the  conflicts  between 
employers  and  employees  increased  until  riots  and  bloodshed  became  so  numer- 
ous as  to  excite  little  interest  except  in  the  most  extreme  cases.  During  the 
years  1883,  1884,  1885  and  1886  we  had  2,977  strikes  in  17,271  establishments, 
embracing  1,039,011  employees.  The  number  of  strikes  increased  from  471 
affecting  129,591  employees  in  1881,  to  1,411,  affecting  499,489  employees  in 
1886.  During  the  years  1882  to  1886,  inclusive,  lockouts  occurred  in  2,214 
establishments,  affecting  175,270  employees.  The  estimated  wage  loss  to 
employees  by  reason  of  strikes  and  lockouts  during  these  six  years  aggregated 
$59,972,440.  In  1890  the  McKinley  law  went  into  operation,  and  under  the 
influence  of  this  act  the  number  of  failures  rose  from  10,9C7,  with  liabilities 
aggregating  |189,856,964  in  1890,  to  12,273,  with  liabilities  aggregating 
$189,868,693  in  1891,  and  the  conflicts  between  em^ployers  and  employees,  which 
had  theretofore  culminated  only  in  combats  and  riots,  became  battles  between 
great  forces  armed  with  rifle  and  cannon.  The  number  of  failures  in  1892  was 
10,270,  while  in  1893  it  reached  the  maximum  height,  15,560,  with  liabilities 
aggregating  $462,000,000  as  against  assets  amounting  to  $262,000,000.  In  no 
country  has  there  been  such  a  disturbed  and  unsettled  condition  as  we  had. 
We  reached  a  point  when  idleness  became  so  common  that  the  feats  of  the  tramp 
were  considered  weighty  demonstrations  of  civic  unrest. 

DELUSIVE   REPUBLICAN   PROMISES. 

Defending  the  course  of  the  Eepublican  patty  in  1890,  Senator  Dawes  said : 
"  The  Republican  party  declared  unequivocally  for  tariff  reform,  and  for  a 
reduction  of  the  treasury  receipts  to  those  actual  expenditures  that  a  rigid  ecoii- 
omy  alone  justify."  On  this  statement,  Ex-Speaker,  now,  Secretary  Carlisle 
made  the  following  scornful  and  exhaustive  comment  : 

*'  If  the  Senator  reallj/  believes  that  this  pledge  will  be  redeemed  in  accord- 
ance with  the  obvious  meaning  of  its  terms,  he  has  that  kind  of  faith  that 
removes  mountains.  Up  to  the  present  time  there  are  certainly  no  ii;dications 
that  the  revenue  will  be  reduced  as  it  ought  to  be,  or  that  economy  will  be 
practiced  in  any  department  of  the  Government.  On  the  contraiy,  it  is  evident 
that  if  the  policy  so  far  pursued  is  continued,  the  whole  revenue  that  can  be 
collected  under  the  laws  as  they  now  exist  will  be  insufficient  to  meet  the  extra- 
ordinary demands  that  will  be  made  upon  the  Treasury.  The  surplus  will  be 
reduced,  but  taxation  will  be  increased  on  many  important  articles.  A  mere 
enumeration  of  the  bills  now  pending  in  C'ongress  for  the  appropriation  of 
money  and  for  the  creation  of  liabilities  to  be  discharged  in  the  future,  would 
be  sufficient  to  show  the  extravagant  policy  of  the  party  in  power ;  and  it  is 

1.83 


PROTECTION   THE   PARENT   OP   NATIONAL   DISASTER. 


evident  that  if  only  a  small  percentage  of  these  bills  should  be  passed,  the 
existing  surplus  would  be  exhausted  and  a  reduction  of  the  revenue  postponed 
for  many  years.  If  any  considerable  number  of  them  are  passed,  additional 
taxation  will  be  necessary,  or  the  public  debt  will  have  to  be  increased." 

"  But  whatever  may  be  done  by  the  present  Congress  in  regard  to  pensions, 
subsidies,  bounties  and  other  projects  now  pending  for  the  expenditure  of  the 
public  money,  it  is  safe  to  say  that  if  any  changes  are  made  in  the  revenue  laws 
they  will  increase  the  rates  of  duty  wherever  an  increase  will  impose  additional 
burdens  upon  consumers,  and  reduce  the  rates  only  in  cases  where  reduction 
will  not  affect  importations  or  materially  diminish  prices.  Such  a  '  re-adjust- 
ment of  customs  duties  as  will  produce  the  most  effective  protection  to 
A  merican  products  and  labor,'  according  to  the  Republican  theory  of  protec- 
tion, will  necessarily  reduce  the  revenue  by  prohibiting  importation  of  dutiable 
good?,  but  it  will  not  reduce  taxation  upon  the  people.  It  will  in  fact  increase 
taxation,  but  the  tribute  paid  by  the  consumers  will  go  into  the  private  coffers 
of  the  domestic  producers,  and  not  into  the  public  treasury.  In  the  end,  how- 
ever, it  will  be  of  no  real  benefit  to  anybody  ;  for,  while  it  will  largely  enhance 
the  prices  of  finished  products  and  thus  impose  upon  the  domestic  consumer  a 
burden  he  ought  not  to  bear,  it  will  also  increase  the  cost  of  production  and 
exclude  our  manufactures  from  all  the  markets  of  the  world  except  our  own. 
The  Republican  tariff  policy  as  defined  and  advocated  by  Senator  Dawes  and 
the  school  of  economists  which  now  dominates  that  party,  has  already  reduced 
many  of  our  most  important  manufacturing  industries  to  the  verge  of  bank- 
ruptcy, while  its  disastrous  effects  upon  the  agricultural  interests  of  the  coun- 
try have  been  so  general  that  the  wail  of  the  farmer  is  heard  in  every  part  of 
the  land.  There  has  never  been  a  time  in  our  history  when  there  was  so  much 
discontent  and  so  little  prospect  of  improvement  as  there  is  now  among  those 
classes  that  ought  to  be  prosperous.  It  is  not  the  wage-earner  alone  that  sends 
his  petitions  and  complaints  to  Congress  and  its  committees.  Nearly  every 
trade,  occupation  and  profession  is  organized  to  formulate  and  present  its 
demand  for  relief,  and  the  Republican  party  responds  to  their  appeals  by  propos- 
ing to  extend  and  strengthen  the  protective  system  of  taxation  under  which 
they  have  been  reduced  to  their  present  condition.  This,  and  the  appropriation 
of  public  money  out  of  the  Treasury  for  the  benefit  of  a  few  favorite  classes, 
is  the  only  remedy  it  proposes.  The  evils  resulting  from  thirty  years  of  protec- 
tion are  to  be  cured  by  more  protection,  and  the  over-burdened  taxpayers 
are  to  be  relieved  by  having  their  forced  contributions  given  away  to  wealthy 
individuals  and  corporations  engaged  in  the  foreign  carrying  trade.  The  farmer 
will  continue  to  sell  his  products  in  a  cheap  market,  and  to  buy  his  supplies  in 
a  dear  one.  He  will  see  his  competitors  in  South  America,  India,  Hungary, 
Russia  and  other  parts  of  the  world  constantly  and  rapidly  encroaching  upon 
the  foreign  markets  in  which  he  sells  his  surplus,  and  he  will  be  powerless 

1.84 


PROTECTION   THE   PARENT   OF   NATIONAL   DISASTER. 

to  make  head  against  them,  because  the  laws  of  his  country  forbid  hiin  to 
exchange  his  products  for  the  things  he  needs,  and  to  bring  them  here  unless 
he  pays  a  tax  upon  them  equal  or  nearly  equal  to  their  cost  abroad.  The 
American  manufacturer  will  find  his  boasted  home  market  not  merely  unwilling, 
but  unable,  to  take  his  goods  at  the  high  prices  which  are  necessary  to  compen- 
sate him  for  the  increased  cost  of  production  due  to  the  taxes  on  his  raw 
materials." 

THE  KESULTS  OF  PROTECTION. 

"  While  high  protective  duties  have  undoubtedly  in  many  cases  enabled  the 
producers  of  the  protected  articles  to  realize  enormous  profits  upon  their  invest- 
ments, the  mere  fact  that  prices  are  higher  here  than  abroad  does  not  always 
indicate  that  large  profits  are  being  made.  Under  our  system,  high  prices,  or 
comparatively  high  prices,  are  absolutely  necessary  in  order  to  enable  our  man- 
ufacturers to  carry  on  their  business,  because  their  material  costs  tliem  more 
than  it  costs  any  other  producers  in  the  world  ;  and  as  long  as  it  is  taxed  as  it 
now  is,  this  will  continue  to  be  the  case.  It  is  not  the  wages  of  labor  in 
this  country  that  increases  the  cost  of  production,  for  all  the  reliable  evidence 
upon  the  subject  goes  to  show  that,  although  wages  by  the  day  or  week,  as 
the  case  may  be,  are  higher  here  than  abroad,  yet  the  actual  cost  of  the 
labor  to  the  employer,  compared  with  the  amount  and  value  of  its  products 
is  less  in  the  United  States  than  elsewhere.  What  the  laboring  man  most 
needs  is  steady  employment,  and  this  protection  cannot  give  him.  That  policy 
which  encourages  trade,  facilitates  the  exchange  of  commodities  and  opens 
the  markets  of  the  world  to  his  products,  is  the  best  policy  for  him,  because 
it  widens  the  area  of  consumption  and  increases  the  demand  for  his  labor. 
Unless  a  small  market  ii  better  than  a  large  one,  the  restrictive  policy  of 
the  Republican  party  cannot  permanently  be  beneficial  either  to  the  capi- 
talists engaged  in  productive  industries  or  to  their  employees.  It  is  not  an 
American  policy,  but  a  Chinese  policy,  that  Senator  Dawes  and  his  party  are 
advocating  ;  and  its  real  character  and  purpose  cannot  be  concealed  by  reit- 
erating the  charge  that  its  opponents  propose  to  give  to  foreigners  * '  the 
possession  of  our  markets  and  the  control  of  our  labor."  If  partial  commercial 
isolation  is  good  for  the  country,  total  isolation  must  be  better;  and  the 
Republican  party,  with  complete  control  of  the  Government  in  all  its 
departments,  performs  less  than  its  whole  duty,  according  to  its  own  theory, 
when  it  stops  short  of  absolute  prohibition  of  international  trade.  There  are 
very  few,  if  any,  articles  of  necessity  that  cannot  be  produced  here,  if  a 
sufficient  amount  of  money  is  expended  in  their  growth  '  or  manufacture  ; 
and  as  protection  is  supposed  to  help  everybody,  including  even  the  consumer 
who  is  compelled  to  pay  the  increased  cost  of  production,  why  should  we 
not  be  required  to  provide  for  all  our  wants  regardless  of  the  expense  ? 

1.85 


PROTECTION   THE   PARENT   OF   NATIONAL   DISASTER. 


THE   HAKRISON  ADMINISTRATION. 

It  is  unquestionably  true  that  the  whole  adminisbratioa  of  Mr.  Harrison, 
with  the  exception  of  the  first  year,  which  was  in  some  respects  prosperous,  as 
a  result  of  the  great  impetus  given  to  it  by  the  four  preceding-  years  of  sound 
economical  administration,  was  that  of  falling  revenues,  increasing  expendi- 
tures and  a  heavy  flow  of  gold  from  the  country.  Any  of  these  was  calculated 
to  excite  apprehension,  but  the  three  combined  were  sufficient  to  and  did  destroy 
private  confidence  as  well  as  the  public  credit.  The  sound  financial  condition 
of  the  Treasury  at  the  time  Mr.  Cleveland  delivered  his  trust  to  Mr.  Harrison, 
enabled  the  latter  to  glide  smoothly  through  the  first  year  of  his  administra- 
tion, but  when  he  returned  it  to  the  hands  from  whence  he  received  it  there 
was  nothing  but  impaired  credit  and  an  empty  purse. 

At  the  very  beginning-  of  Mr.  Harrison's  administration  a  feeling  of  unrest 
and  insecurity  began  to  show  itself  in  financial  centres  and  continued,  with 
slight  intervals,  to  the  end  of  his  term.  During  the  year  1S90  the  financial 
stringency  became  so  great  that  Secretary  Windom  was  compelled  to  purchase 
government  bonds  to  the  amount  of  $73,694,850,  for  which  he  paid  premiums 
amounting  to  $21,233,894.  During  the  last  months  of  Mr.  Harrison's  adminis- 
tration all  sorts  of  rumors  were  in  circulation.  The  report  was  current  that 
an  issue  of  bonds  had  been  contracted  by  Secretary  Foster  in  order  to  protect 
the  gold  reserve  in  the  Treasury,  and,  but  for  the  assistance  of  the  New  York 
bankers,  such  a  transaction  certainly  would  have  been  necessary.  He  had,  in 
fact,  given  orders  for  the  preparation  of  the  plates  upon  which  the  bonds  were 
to  be  printed. 

It  was  only  by  a  change  in  the  form  of  the  statement  and  a  juggling  with 
the  funds  that  Secretary  Foster  was  able  to  show  an  apparent  balance  at  the 
end  of  his  term.  Under  the  provisions  of  an  act  passed  by  the  Fifty-first  Con- 
gress, the  fund  in  the  Treasury  for  the  redemption  of  the  national  bank  notes 
was  made  an  asset  instead  of  a  liability.  The  surplus  in  the  Treasury  was  in 
this  way  inflated  by  the  transfer  of  $54,207,975  from  one  side  of  the  ledger  to 
the  other.  Not  a  single  cent  was  by  this  change  added  to  the  assets  nor  a  single 
penny  taken  from  the  liabilities,  yet  there  was  an  apparent  increase  of  the  sur- 
plus of  more  than  fifty  millions  of  dollars. 

The  subsidiary  silver  coins,  being  a  legal  tender  for  sums  not  exceeding  five 
dollars,  had  been  considered,  prior  to  Mr.  Harrison's  administration,  as  unavail- 
able for  the  payment  of  the  obligations  of  the  Government,  and,  therefore,  had 
not  been  counted  as  an  available  asset.  This  was  likewise  transferred  from  the 
column  of  unavailable  to  the  column  of  the  available  assets,  and  the  surplus 
was  again  augmented  without  the  addition  of  a  farthing.  Had  this  system  of 
stating  the  accounts  been  in  use  at  the  end  of  Mr.  Cleveland's  term,  the  surplus 
in  the  Treasury,  including  the  reserve,  would  have  been  $183,837,190,  instead 

1.86 


PROTECTION   THE   PARENT   OF   NATIONAL   DISASTER. 


of  $148,096,158.  Whatever,  therefore,  of  these  two  funds  was  on  hnm\  at 
the  end  of  Mr.  Harrison's  administration  should  have  been  deducted  from  the 
surplus  as  stated  in  order  to  arrive  at  the  true  balance.  The  amount  of  the 
National  Bank  Redemption  Fund  on  hand  March  1,  1893,  was  $33,273,001,  and 
of  fractional  silver,  $10,971,875,  the  aggregate  of  the  two  being  $33,343,936. 
Deducting  these  sums  from  the  balance  of  March  1,  1893,  to  wit,  $34,128,087, 
and  there  was  a  real  deficiency  of  $9,115,849. 

This  was  the  condition  when  Secretary  Carlisle  took  charge.  The  surplus 
had  been  squandered  ;  our  gold  was  being  transported  to  Europe  at  the  rate  of 
$13,000,000  a  month  ;  the  expenditures  had  increased  more  than  $60,000,000  a 
year,  while  the  revenues  had  fallen  off  $18,000,000,  and  yet  he  was  expected, 
and  Republicans  affected  to  be  surprised  that  he  was  not  able,  to  at  once  fully 
restore  public  confidence  and  give  prosperity  and  financial  stability  to  every 
industry  and  enterprise  throughout  the  country. 

FALSE   CLAIMS  PUNCTURED. 

The  pretext  that  high  protective  duties  have  been  the  foundation  of  our 
national  prosperity  is  very  thoroughly  riddled  in  the  following  extracts  from 
a  speech  delivered  by  Senator  Mills,  of  Texas,  in  the  United  States  Senate  on 
April  24,  1894. 

Did  not  the  Democratic  Convention  at  Chicago  hit  the  nail  on  the  head 
when  they  branded  protection  as  a  fraud  ?  In  the  name  of  the  working 
people,  thousands  of  whom  they  have  turned  out  of  employment  and  into 
the  streets,  they  have  plundered  the  country  to  build  up  a  plutocracy ;  and 
now  here  in  the  midst  of  the  widespread  distress  which  they  have  sown  from 
their  hands  they  have  the  effrontery  to  still  defend  the  monumental  robbery 
in  the  name  of  the  poor  workiugman.  *  *  *  i  give  here  a  list  of  articles 
which  show  from  the  census  returns  what  wages  are  paid  and  from  the  tariff 
what  protection  is  voted  for  our  workmen. 

In  one  ton  of  steel  rails  the  labor  cost  is  $3 ;  the  tariff  is  $13.44. 

In  $100  worth  of  cutlery  the  labor  cost  is  $44.24  ;  the  tariff  is  $80.11. 

In  $100  worth  of  mats  and  matting  the  labor  cost  is  $34.90  ;  the  tariff  is 
$68.59. 

In  $100  worth  of  silk  piece  goods  the  labor  cost  is  $33.54;  the  tariff  is  $60. 

In  $100  worth  of  cigars  and  cigarettes  the  labor  cost  it  $34.51 ;  the  tariff  is 
$135.36. 

In  $100  worth  of  woolen  or  worsted  cloths  the  labor  cost  is  $30.85  ;  the 
tariff  is  $100.03. 

In  $1(  0  worth  of  pottery  the  labor  cost  is  $45.96 ;  the  tariff  is  $60. 

In  $100  worth  of  pearl  buttons  the  labor  cost  is  $39.69  ;  the  tariff  is 
$143.61. 

In  $100  worth  of  tannin  the  labor  cost  is  $16.34  ;  the  tariff  is  $119.47. 

1.87 


PROTECTION    THE    PARENT    OP    NATIONAL    DISASTER. 


In  $100  worth  of  coal  the  labor  cost  is  from  $40  to  $50 ;  the  tariff  is  $75. 

In  $100  worth  of  cotton  goods  the  labor  cost  is  $24.24  ;  the  tariff  is  $57.08. 

In  $100  worth  of  linen  the  labor  cost  is  $32.92 ;  the  tariff  is  $50. 

In  $100  worth  of  common  window  g-lass  the  labor  cost  is  $58.09  ;  the  tariff 
is  $98.39. 

In  one  ton  of  pig  iron  the  labor  cost  is  $1.50  ;  the  tariff  is  $6.72. 

In  one  ton  of  bar  iron  the  labor  cost  is  $4.57  ;  the  tariff  is  $52.98. 

The  only  way  that  the  laborer  can  receive  any  benefit  is  by  the  law  of 
nature,  that  gives  him  constant  employment,  that  gives  him  employment  with 
a  constant  d(  mand  for  his  work.  That  is  only  done  when  we  increase  the 
consumption  of  the  things  upon  which  labor  is  expended,  and  we  increase  the 
consumption  of  the  product  of  labor  when  we  reduce  the  cost  of  making  them 
— the  labor  cost  and  every  other.  Now,  machinery  does  that,  and  so  does  the 
reduction  of  taxes.  Then  we  must  reduce  the  cost  of  reaching  market  and 
remove  obstacles  out  of  the  way  so  that  we  may  get  there.  We  must  increase 
the  demand  for  employment,  and  as  the  demand  for  the  employment  of  labor 
increases  by  the  increased  consumption  of  the  things  that  labor  makes,  so 
wages  will  increase  and  employment  will  be  constant. 

THE  TRUE   CAUSES  OP  LOWER  PRICES. 

Our  friends  contend  that  because  prices  have  been  falling  here  in  the  United 
States  since  they  have  had  a  tariff,  that  the  tariff  is  the  cause  of  the  lovsrering 
of  prices,  and  they  are  constantly  pointing  to  us  the  fact  that  the  price  of  a 
certain  thing  was  so  much  thirty  years  ago,  and  it  is  so  much  less  now.  My 
distinguished  and  venerable  friend  across  the  way  (Mr.  Morrill)  told  us  the 
other  day  in  his  speech  that  two-ply  ingrain  carpet  was  worth  $1  a  yard 
thirty  years  ago,  and  that  it  is  now  worth  50  cents  a  yard.  Behold  the 
tariff !  The  tariff  did  all  this  thing !  He  did  not  tell  us  that  the  labor  cost 
of  that  yard  of  ingrain  carpet  is  now  6  cents  a  yard,  and  the  tariff  on  it  is 
over  60  per  cent,  to  protect  it  against  competition,  when  the  labor  cost  of 
that  amount  of  goods  in  Great  Britain  is  7  cents.  How  does  my  friend  or 
how  does  any  other  man  account  for  the  fact  that  prices  have  been  falling 
in  free-trade  England  as  well  as  in  the  United  States  for  the  last  thirty 
years?  It  will  not  do  to  say  that  the  tariff  reduces  prices  in  the  United 
States  and  free  trade  reduces  prices  in  Great  Britain.  The  same  cause, 
under  the  same  circumstances,  ought  to  produce  the  same  result.  They  tell  us 
it  will ;  but  here  we  have  prices  brought  down  by  free  trade  in  Great  Britain 
and  under  a  protective  tariff  in  the  United  States.  Prices  have  been  brought 
down  by  improved  production,  by  machinery,  by  invention,  increasing  the 
amount  of  product  in  a  given  time,  and  lowering  the  cost  of  the  product.  I 
have  here  some  figures  that  will  give  an  illustration  of  the  fact. 

1.88 


PKOTECTION    THE    PARENT    OF   NATIONAL   DISASTER. 

A  long  time  ago  when  we  were  boys,  when  our  mothers  were  spinning  with 

the  old  hand  wheel — 

One  thousand  persons  in  one  week  spun  3,000  pounds  of  cotton  yarn, 

Ko.  10,  at  $1.50  each $1,500  00 

One  jierson  now  spins  3,000  poinds  of  cotton  yarn,  No.  10,  and  re- 
ceives for  wages  6  00 

Reduction  in  labor  lost  $1,494  00 

Our  friends  point  to  it  and  say  a  protective  tariff  did  that,  not  the  spinning 
jenny — not  the  skill  and  genius  of  the  man  who  worked  the  machine  and  the 
man  vvho^in vented  it,  but  a  protective  tariff  ;  and  you  levy  50  per  cent,  duty  on 
cotton  yarn  and  say  that  dut}^  did  that. 

Let  us  follow  that  up  a  lit'le  further : 
The  cost  price  of  3,000  pounds  of  yarn  then,  at  75  cents  per  pound. .   $2,250  00 
The  cost  price  of  3,000  pounds  of  No.  10  cotton  yarn  now,  at  15  cents 

perpouud 450  00 

Reduction $1,800  00 

By  a  protective  tariff  : 

Labor  cost  of  247  hand  weavers  required  to  weave  3,000  pounds  of 
yarn  into  11,100  yards  of  sheeting,  each  weaving  45  yards  per 
week  and  receiving  $3  per  week  as  wages,  was $741  00 

Labor  cost  now  of  8  weavers  weave  that  amount  in  one  week  and 

receive  $6  per  week  as  wages 48  00 

Reduction  iu  weaving $693  00 

Cost  of  cloth  made  by  hand  spinning  and  weaving,  at  40  cents  per 

yaid $4,440  00 

Cost  of  cloth  now,  at  7  cents  per  yard,  by  machinery ...         777  00 

Reduction  in  cost $3,063  00 

And  they  say  a  protective  tariff  did  it — not  the  spinning  jenny  and  the 
power  loom,  but  the  protective  tariff  that  levies  50  per  cent,  duty  on  cotton 
yarn  and  57  per  cent,  on  cotton  goods, 

Adam  Smith  tells  of  the  immense  benefits  that  come  by  the  division  of  labor 
in  making  pins,  from  which  I  have  gathered  these  figures  : 
Labor  cost  of  521  persons  required  to  make  2,500,000  pins  in  one  day, 

at  one  cent  per  hundred,  was $250  00 

Labor  cost  of  one  person,  who  now  makes  2,500,000  pins  in  one  day, 

and  receives  as  wages  $1 1  00 

Reduction $249  00 

1.89 


PROTECTION    THE   PAKE  NT    OF  "NATIONAL   DISASTER. 

That  is  done  by  a  pin  machine.  Yet  our  friends  stand  here  and  tell  us  lb. 'it 
is  done  by  a  protective  tariff,  and  put  no  more  duty  m  the  interest  of  the  poor 
workingman,  and  get  him  to  believe  that  a  protective  tariff  benefits  him. 
Adam  Smith  stuck  pins  in  the  protective  tariff  in  Great  Britain  till  it  was  dead, 
and  the  common  school-house  and  the  school-master  in  this  country  are  sticking 
pins  in  it  now.  and  will  continue  to  stick  pins  in  it  till  it  is  as  dead  in  this  coun- 
try as  it  is  in  Great  Britain. 

It  would  have  required  58  persons,  working  one  week,  each   making 
12,000   eight-penny  nails  to  make  704,000,  now  made  by  one, 

and  the  wages  of  the  58,  at  $6  each,  was $348  00 

They  are  now  made  by  one  hand  at  $5  per  day,  six  days 80  00 

Reduction |318  00 

It  is  not  taxing  that  reduces  the  price  of  a  thing.  Adding  to  the  cost  never 
reduces  the  price.  That  cannot  be  done.  Adding  to  the  cost  of  a  thing  in- 
creases the  price  of  a  thing,  or  mathematics  is  a  lie.  It  is  taking  from  the  cost 
of  a  thing  that  reduces  the  price  of  it.  That  is  what  machinery  does,  what  a 
revenue  tax  does,  and  that  is  what  free  trade  does  still  better.  There  can  be 
no  justification  on  earth,  either  in  politics  or  common  justice,  to  tax  the  prod- 
ucts of  human  labor  except  to  support  the  administration  of  government." 


1.90 


THE    QUESTION    OF    LAW   AND    ORDER. 

While  there  are  honcpt  diilerences  of  opinion  about  the  rights  and  wronj^s  of  the  great 
railroad  strike  of  1894,  there  can  he  no  dispute  about  the  nece.-:Sity  of  upholding  the  supremacy 
of  the  law.  The  use  of  the  physical  arui  of  the  Government  to  uphold  tlic  law  is  an  incident 
of  sovereignty,  and  to  deny  the  existence  oT  any  such  right  is  to  reduce  the  Government  to 
helplessness  From  the  interpretation  of  the  law  adopted  by  the  Circuit  Court  an  appeal  was 
taken  to  the  Supreme  Court  of  the  United  States  and  by  an  absolutely  unanimous  vote,  the 
decision  of  the  Circuit  Court  was  affirnied.  To  defy  the  lav/  thus  applied  and  thus  affirmed 
is  to  assert  that  there  is  no  authoriiative  exposition  of  law  to  be  found  in  the  country,  and 
that  a  party  convention  may  place  its  judgment  above  that  of  a  unanimous  Supreme  Court. 

The  Chicago  platform  deuounces  "  Arbitrary  interference  by  Federal  authori- 
ties iu  local  affairs  as  a  violation  of  the  Constitution  of  the  United  States  and  a 
crime  against  free  institutions."  This  either  means  something  or  nothing,  and 
its  authors  have  only  themselves  to  blame  that  it  is  considered  a  defense  of 
anarchy,  when  it  is  notorious  that  the  most  urgent  support  of  this  plank  came 
from  those  v^^hose  acts  upon  a  late  occasion  led  to  riot  and  from  a  Governor  who 
had  failed  to  enforce  the  laws  of  his  own  State  again  t  it.  No  one  seriously 
questions  the  power  and  the  duty  of  the  United  States,  not  merely  upon  a 
State's  request  to  assist  it  to  maintain  order  within  its  territory,  but  of  its  own 
motion  to  protect  United  States  proj  erty  and  enforce  Federal  law.  Faced  with 
conditions  which  called  for  the  exercise  of  this  constitutional  power  a  President 
can  no  more  inquire  into  the  merits  of  the  controversy  from  which  the  violation 
of  Federal  law  or  the  danger  to  Federal  property  has  originated  than  could  a 
policeman  decline  to  protect  a  citizen  against  assault  until  l;ehad  satisfied  him- 
self whether  or  not  the  aggressor  had  cause  for  indignation.  Such  matters 
are  for  the  courts,  not  for  the  Executive.  Not  merely  is  the  coujage  of  a 
President  who  did  not  dare  do  otherwise  than  promptly  enforce  the  law  admi- 
rable in  itself,  but  the  principle  thus  vindicated  is  of  the  greatest  possible 
importance  to  our  wage-earners  and  humbler  citizens.  It  is  to  prt^tect  them 
against  arbitrary  misrule  in  the  interest  of  wealth  and  power  that  laws  are 
made;  and  every  concession  to  them  by  connivance  at  their  breaking  of  law  is 
in  the  end  paid  for  by  them  tenfold  in  the  advantage  always  taken  by  wealth 
and  power  of  any  disposition  on  the  part  of  courts  to  strain  the  law  on  behalf 
of  favored  suitors. 

The  great  Chicago  railroad  strike  of  1894  was  any  thing  but  a  "  local  affair." 
It  involved  the  railroad  employees  oC  fifteen  States  and  w^as,  incidentally,  the 
cause  of  vioknce  and  rioting  which  almost  amounted  to  open  insurrection. 
There  were  public  rights  and  interests  invaded.  Interstate  commerce  was 
obstructed.  The  stoppage  of  mail  trains  deprived  the  people  of  the  means  of 
friendly  communication  and  assistance.     The  United  States  Government,  con- 

1.91 


THE  QUESTION  OP  LAW  AND  ORDER. 


ducting  the  mail  service  as  an  agent  of  the  people,  was  hindered  and  restrained 
from  the  performance  of  this  duty.  The  question  was  presented  :  Ought  not 
the  government  to  have  and  exercise  the  power  to  summarily  remove  all  ob- 
structions to  the  performance  of  duties  which  it  owes  to  the  whole  people  ? 

THE  USE  OF  THE  TROOPS. 

According  to  the  report  of  the  Strike  Commission,  the  President  ordered 
the  troops  to  Chicago  for  the  following  purposes  : 

(1)  To  protect  Federal  property. 

(2)  To  prevent  obstruction  in  the  carrying  of  the  mails. 

(3)  To  prevent  interference  with  the  interstate  commerce. 

(4)  To  enforce  the  decrees  and  mandates  of  the  Federal  Courts. 

The  constitutional  power  of  the  President  to  issue  such  an  order  is  not 
doubtful.  As  Mr.  E.  A.  Bancroft  of  the  Chicago  bar,  in  a  monograph  upon 
this  subject,  puts  it:  "The  President  of  the  United  States,  when  Congress 
is  not  in  session,  controls  the  physical  arm  of  the  United  States—its 
military  and  naval  forces.  He  is  clothed  by  the  Constitution  with  author- 
ity to  use  that  power  upon  his  own  initiative  and  judgment  to  resist  physical 
assaults  upon  the  life,  authority  or  property  of  the  United  States.  These 
assaults  must  be  directed,  however,  against  its  sovereignty.  Resistance  merely 
to  its  control  of  its  property  or  to  its  assertion  of  its  power,  and  not  intended  to 
question  its  sovereignty,  would  not  warrant  the  exercise  of  this  perogative'by 
the  President  without  specitic  authority  from  Congress.  That  authority  has 
been  given  to  resist  interference,  and  to  protect  Government  property  and  the 
rights  of  the  people  under  the  Constitution. 

Whenever  insurrection,  domestic  violence,  unlawful  combinations  or 
conspiracies  in  any  State  so  obstruct  or  hinder  the  execution  of  the  laws 
*  *  *  as  to  deprive  any  person  of  any  rights,  privileges  or  immunities  or 
protection  named  in  the  Constitution  *  *  *  and  the  constituted  authori- 
ties of  such  State  -^  *  *  fail  in  or  refuse  protection  of  the  people  in  such 
rights ;  *  *  *  or  whenever  any  such  insurrection,  violence,  unlawful 
combination  or  conspiracy  opposes  or  disturbs  the  laws  of  the  United  States,  or 
the  due  execution  thereof  or  impedes  or  obstructs  the  due  course  of  justice 
under  the  same."— U.  S.  K.  S.,  sections  5,  299,  Act  of  April  20,  1871. 

The  President's  authority  and  duty  to  take  such  action  in  view  of  the  facts 
arose  from  the  necessary  power  of  the  nation  to  vindicate  through  the  President 
its  sovereignty  over  the  subjects  named,  as  well  as  from  the  statute  already 
quoted.  As  was  said  by  the  Supreme  Court  {in  ex  parte  Siehold,  100  U.  S., 
371,  395)  : 

"  We  hold  it  to  be  an  incontrovertible  principle  that  the  Government  of  the 
United  States  may  by  means  of  physical  force  exercised  through  its  official 

1.92 


THE   QUESTION    OF   LAW   AND    OBDER. 


agents  execute  on  every  foot  of  American  soil  the  powers  and  functions  that 
belong  to  it.  *  *  *  The  Government  must  execute  its  powers,  or  it  is  no 
Government." 

ATTORNEY-GENERAL   HARMON'S  STATEMENT. 

Attorney-General  Judson  Harmon  thus  states  the  legal  relations  of  the  action 
of  the  President  : 

"I  have  concluded  to  give  a  public  answer  to  the  many  inquiries  made  of 
me  upon  a  subject  of  great  moment  to  which  general  attention  is  now  directed. 

Mr.  Bryan,  in  his  letter  accepting  the  nomination  for  President  by  the  con- 
vention at  Chicago,  amplifies  the  protest  which  that  convention  made  in  its 
platform  against  Federal  interference  in  local  affairs,  which,  strangely  enough, 
is  not  found  in  the  platforms  of  the  other  two  conventions  which  have  also 
nominated  him. 

As  nothing  else  has  been  done  or  proposed  to  which  they  can  possibly  apply, 
these  protests  were  intended  and  are  understood  to  be  directed  against  the 
recent  action  of  the  President  in  forcibly  suppressing  riotous  disturbances 
which  had  stopped  the  carriage  of  the  mails  and  interstate  commerce  and 
were  defying  the  civil  oflEicers  of  the  United  States. 

The  President  took  this  action  not  only  without  the  request,  but  in  some 
instances  against  the  protest,  of  the  authorities  of  the  States  in  which  the  riots 
occurred,  and  Mr.  Bryan,  taking  section  4  of  Article  IV.  of  the  Constitution  to 
be  the  law  on  the  subject,  pledges  himself  against  any  repetition  of  the  viola- 
tion thereof  which  his  letter  necessary  charges.  He  vindicates  the  wisdom  of 
the  framers  of  the  Constitution  by  declaring  that  the  local  authorities  "are 
better  qualified  to  judge  of  the  necessity  of  Federal  assistance." 

This,  in  my  judgment,  is  a  far  more  serious  matter  than  the  money  question, 
or  any  of  the  other  questions  now  before  the  people,  grave  as  they  all  are.  Our 
form  of  government  may  survive  a  wrong  decision  of  those  questions,  and  the 
people  may  endure  for  a  time  the  evils  which  result  from  false  systems  of 
finance  and  taxation,  but  if  the  President  has  deliberately  disregarded  the  in- 
stiument  upon  which  the  Union  is  founded,  by  supplanting  the  authority  of  a 
soverign  State  by  armed  force,  a  precedent  has  been  made  which  threatens  our 
form  of  government ;  while,  if  a  candidate  for  President  may  properly  pledge 
himself  in  advance,  as  Mr.  Bryan  has  done,  to  do  nothing  to  protect  the  prop- 
erty, maintain  the  authority,  and  enforce  the  laws  of  the  United  States  unless 
and  until  the  officers  of  another  government  request  or  consent,  then  we  really 
have  no  Federal  Government.  For  a  government  which  is  not  entirely  free  to 
use  force  to  protect  and  maintain  itself  in  the  discharge  of  its  own  proper 
functions  is  no  government  at  all. 

The  section  of  the  Constitution  to  which  Mr.  Bryan  refers  is  as  follows  : 

The  United  States  shall  guarantee  to  every  State  in  this  Union  a  republican 

1.93 


THE  QUESTION  OF  LAW  AND  ORDER 


form  of  government,  and  shall  protect  each  of  them  against  invasion  and,  on 
application  of  the  Legislature  or  the  Executive  (when  the  Legislature  cannot 
be  convened)  against  domestic  violence. 

This  section  plainly  refers  merely  to  the  protection  of  the  States  against  in- 
terference with  their  authority,  laws  or  property  by  domestic  violence,  and  they 
are  wisely  made  solely  the  judges  whether  or  when  they  need  such  protection. 
Mr.  Brj'^an  displays  a  consciousness  of  the  limited  operation  of  this  provision  in 
the  expression  'Federal   assistance,'  in  the  clause  I  have  quoted. 

But  by  the  express  terms  of  the  Constitution,  a  State  has  nothing  to  do  with 
the  maintenance  of  the  authority  or  the  execution  of  the  laws  of  the  United 
States  within  the  territory  of  the  State.  The  prevention  and  punishment  of 
offenses  connected  with  the  mails,  with  interstate  commerce,  and  with  the  ad- 
ministration of  justice  in  the  Federal  courts  are  committed  to  the  General 
Government,  and  to  it  alone.  Such  offenses  in  no  wise  menace  the  government 
of  the  State  within  v/hich  they  are  committed.  Therefore  the  State  cannot 
require  protection  against  them.  The  State  has  no  duties  to  discharge  in  these 
matters.  Therefore,  it  can  require  no  '  Federal  assistance  '  with  respect  to 
them. 

Of  course,  domestic  violence  often,  as  in  the  recent  riots,  is  directed  against 
both  State  and  Federal  authority  indiscriminately,  and  either  or  both  may  sup 
press  it.  And  in  such  cases  the  action  of  each  in  maintaining  its  own  authority 
over  the  subjects  committed  to  it  tends  to  aid  the  other.  But  in  such  cases 
each  is  acting  in  its  own  independent  right  as  a  sovereign  government,  and  on 
it>»  own  behalf.  It  would  be  as  absurd  to  claim  that  the  United  States  must 
neglect  its  own  interests  because  in  protecting  them  those  of  a  State  may  be 
incidentally  protected,  as  to  claim  that  a  State  must  let  riot  run  free  because  it 
happens  to  be  directed  against  Federal  rights  or  officers  as  well  as  its  own. 
This  would  limit  and  belittle  the  sovereignty  of  both  governments,  Imperium 
m  im'perio  would  be  false. 

According  to  Mr.  Bryan  there  is  somewhere  implied  in  the  Constitution — for 
it  is  nowhere  expressed — a  prohibition  of  the  use  of  force  by  the  United  States 
again.st  persons  who,  within  the  limits  of  a  State,  may  be  successfully  resisting 
its  officers  and  completely  paralyzing  all  its  operations  as  a  government,  unless 
the  local  authorities  shall  first  make  request  or  give  consent. 

This  is  contrary  to  the  settled  principle  that,  while  the  Federal  Government 
is  one  whose  operation  is  confined  to  certf^in  subjects,  it  has,  as  to  those  sub- 
jects, all  the  attributes  of  sovereignty,  and  one  of  these  is  always  and  every- 
where within  the  territory  of  the  States  which  compose  it,  to  suppress  and 
punish  those  who  in  any  wise  interfere  with  the  exercise  of  its  lawful  pow- 
ers. The  fact  that  there  are  within  that  territory  other  governments  exercising 
sovereignty  over  all  matters  not  so  committed  to  it  can  make  no  difference  un- 


1.94 


THE    QUESTION   OF   LAW   AND   ORDER. 


der  owr  double  form  of  Government,  the  essential  principle  •  of  which  is  a,  parti- 
tion of  powers  to  be  exercised  independently  over  the  same  territory. 

The  sovereign  right  of  the  United  States  necessarily  follows  its  officers  and 
agents  everywhere  they  go,  protecting  and  maintaining  them  in  the  discharge 
of  their  duties.  Congress  has  accordingly,  by  Section  5297  of  the  Hevised 
Statutes,  authorized  the  President  to  use  the  armed  forces  of  the  Government 
in  aid  of  the  State  authorities  when  requested  by  them,  as  provided  in  the  Con- 
stitution, and  has  also,  by  the  following  section,  5298,  authorized  him  to 
employ  such  forces,"  upon  his  own  judgment  alone,  against  'unlawful  obstruc- 
tions, combinations,  or  assemblages  of  persons,'  'in  whatever  State  or  Territory 
thereof  the  laws  of  the  United  Stales  may  be  forcibly  opposed  or  the  execution 
thereof  obstructed.' 

It  was  under  the  power  conferred  by  this  last  section  that  the  late  rebellion 
was  suppressed.  Mr.  Bryan's  doctrine  that  this  law  is  unconstitutional  is  more 
dangerous  than  that  of  secession.  The  latter,  at  least,  left  the  Government 
some  power  and  authority  in  the  territory  of  States  which  should  choose  to 
remain.     Mr.  Bryan's  would  reduce  it  to  the  idle  mimicry  of  the  stage. 

It  was  no  more  intended  to  make  the  General  Government  dependent  upon 
the  States  with  respect  to  the  matters  committed  to  it  than  to  make  the  States 
subject  to  the  General  Government  with  respect  to  the  rights  reserved  to  them. 
As  the  General  Governinent  is  authorized  to  maintain  a  regular  army  and  navy 
which  the  States  cannot  do,  and  as  the  militia  of  all  the  States  is  subject  to  the 
direcc  call  of  the  President,  it  was  natural  that  the  States  should  be  made  to 
call  on  it  for  aid  against  violence,  but  there  was  no  reason  why  it  would  call 
or  wait  on  them  for  protection  to  itself. 

What  I  have  said  is  well  known  to  lawyers  and  students  of  the  Constitution. 
It  is  chiefly  intended  for  the  people  at  large  before  whom  the  subject  has  now 
been  brought. 

I  will  recall  in  this  connection  the  following  resolution  proposed  by  the  Hon. 
John  W.  Daniel,  of  Virginia,  who  was  president  of  the  convention  which 
nominated  Mr.  Bryan,  which  was  passed  by  the  Senate  July  12,  1894,  Con- 
gressional Record,  page  8663,  without  apparent  dissent : 

'  Resolved,  That  the  Senate  indorses  the  prompt  and  vigorous  rdeasures 
adopted  by  the  President  of  the  United  States  and  the  members  of  his  Ad- 
ministration to  repulse  and  repress  by  military  force  the  interference  of  lawless 
men  with  the  due  process  of  laws  of  the  United  States  and  with  the  transpor- 
tation of  the  mails  of  the  United  States  and  with  commerce  among  the  States, 

'  The  action  of  the  President  and  his  Administration  has  the  full  sympathy 
and  support  of  the  law-abiding  masses  of  the  people  of  the  United  States,  and 
he  will  be  supported  by  all  departments  of  the  Government  and  by  the  power 
and  resources  of  the  entire  nation. ' 

It  must  be  that  Mr.  Bryan,  amid  the  many  demands  of  his  time  and  atten- 
tion, has  fallen  into  an  inadvertence.     I  ca,nnot  believe  that  he  really  thinks  the 

1.95 


THE  QUESTION  OF  LAW  AND  ORDER. 


President  has  no  power  under  tlie   Constitution  and  laws  to  maintain  the 
Government  intrusted  to  his  charge. 

Nor  can  I  believe  that  Mr.  Bryan  means  to  promise  or  to  make  or  to  permit 
others  to  think  he  has  promised  not  to  interfere  if  he  should  be  elected  and 
the  situation  of  the  riots  o£  1894  should  arise  during  his  term.  I  wall  not 
lightly  question  either  his  knowledge  as  a  lawyer  or  his  sincerity  as  public  man. 
Certainly  his  letter  is  generally  misunderstood,  unless  it  means  either  that  Mr. 
Bryan  thinks  the  President  has  no  power,  or  that  he  would  himself  not  use  it  if 
elected." 

TWO  OTHER  VIEWS. 

In  regard  to  this  same  question,  a  well-known  labor  leader  recently  said  in 
a  public  speech  :  "The  men  engaged  in  that  strike,  who  belonged  to  tbe 
American  Railway  Union,  were  dismayed  to  see  that  violence  had  been  resorted 
to,  and  they  earnestly  endeavored  to  put  aa  end  to  it.  They  tendered  their 
services  in  aid  of  law  and  order ;  it  was  their  wish  that  peace  should  be  pre- 
served. Had  not  the  Government  of  Illinois  been  in  the  hands  of  fear  stricken 
politicians  not  a  blow  would  have  been  struck,  not  a  dollar's  worth  of  prop- 
erty would  have  been  destroyed.  It  was  a  lack  of  appreciation  of  the  just 
demands  of  labor  and  a  fear  of  losing  votes  in  the  future  which  prevented 
them  from  doing  their  duty  by  labor  and  the  State  in  checking  vio- 
lence the  moment  it  began.  '  Government  by  injunction '  would  never  be 
known  in  the  United  States  had  government  by  incompetency  not  preceded 
it." 

And  Gov.  Palmer,  in  his  speech  of  acceptance,  said  manfully:  "When 
Governor  of  my  adopted  State,  while  I  opposed  and  by  peaceful  means  suc- 
cessfully resisted  the  interference  of  the  United  States  by  its  military  forces 
in  the  purely  local  concerns  of  the  State,  I  distinctly  conceded  the  right,  and 
asserted  the  duty,  of  that  Government  to  enforce  within  the  States  or  elsewhere 
its  own  laws  by  its  own  agencies." 

"GOVERNMENT  BY  INJUNCTION. 

The  Chicago  platform  continues :  ' '  We  especially  object  to  government  by 
injunction  as  a  new  aud  highly  dangerous  form  of  oppression."  Here  again 
it  would  have  been  more  honest  as  well  as  more  intelligible  if,  instead  of  leav- 
ing to  inference  the  special  wrong  complained  of,  it  had  been  plainly  stated. 
No  one  believes  in  "government  by  injunction."  As  worded,  therefore,  the 
protest  is  meaningless,  unless  a  covert  attack  is  thereby  aimed  against  the 
power  of  the  Federal  Courts  to  use  a  most  efficient  branch  of  its  equity  power. 

The  bill  filed  by  the  United  States  on  July  2  alleged  that  the  American 
Railway  Union  and  its  officers,  naming  them,  had  entered  into  a  combination  and 
conspiracy  embracing  a  great  number  of  persons,  members  of  that  organization 

1.96 


THE   QUESTION    OP   LAW   AND   ORDER. 


and  others  whose  names  were  unknown,  to  tie  up  and  paralyze  certain  specified 
lines  of  railroad,  twenty -two  in  number,  and  to  prevent  them  from  performing 
iheir  usual  duties  as  common  carriers  of  interstate  commerce  and  from  trans- 
porting the  United  States  mails ;  that  the  conspirators,  many  thousands  in 
number,  to  accomplish  such  unlawful  purpose,  by  threats,  intimidation,  force 
a::d  violence  against  the  employees  of  said  railroad  companies  engaged  in  said 
business,  and  by  spiking  switches,  derailing  cars  and  the  like,  had  already 
seriously  interfered  with  their  business  of  transporting  freight  and  passengers 
between  the  States  and  of  carrying  the  United  States  mails,  and  in  many  instances 
had  completely  checked  the  same.  That  the  conspirators  had  gathered  in  large 
mobs  upon  the  lines  of  said  railroads,  and  were  endeavoring  by  violence,  in- 
timidation, threats  and  persuasion  to  induce  the  employees  of  such  railroads  to 
disobey  the  orders  of  their  employers  and  to  refuse  to  perform  their  accustomed 
duties,  and  to  quit  the  service  in  such  business  of  interstate  transportation 
and  the  carrying  of  the  mails  ;  and  by  like  means  were  preventing  and 
attempting  to  prevent  other  persons  desirous  of  entering  such  service  from 
doing  so,  and  were  threatening  to  still  further  interfere  by  the  means  aforesaid 
with  the  operation  cf  trains  and  cars  by  said  companies  engaged  in  interstate 
transportation  until  they  should  completely  tie  up  and  paralyze  the  same. 

THE  ORDER  OP  INJUNCTION. 

An  injunction  was  prayed  against  the  American  Railway  Union  and  its 
officers,  naming  them,  and  thirteen  other  persons,  naming  them,  and  all  other 
persons  whomsoever,  combining  or  conspiring  with  the  defendants  named, 
commanding  them  to  refrain  from  all  acts  and  doings  complained  of  and 
threatened.  As  Mr.  E.  A.  Bancroft,  has  remarked :  "  The  real  scope  of  this 
order  has  been  generally  misstated  and  misunderstood,  and  the  error  has  been 
emphasized  by  dubbing  it  an  '  omnibus '  injunction.  An  examination  of  the 
order  shows  that  it  consists  of  two  parts,  though  they  are  not  separated.  The 
first  portion  enumerates  the  particular  things  which  the  defendants  may  not 
do,  and  those  things  are  all  in  themselves  unlawful  and  injurious.  But  among 
them  the  persuading  of  employees  to  quit  the  service  of  the  railroad  is  not 
included  ;  the  only  use  of  the  word  *  persuade '  is  in  the  clause  forbidding  the 
defendants  to  induce  employees  in  the  service  of  said  railroads  to  refuse  to 
perform  their  duties  as  employees  of  said  railroads  engaged  in  interstate  com- 
merce or  the  carriage  of  the  United  States  mails.  It  does  not  forbid  them  to 
use  persuasion  to  induce  employees  to  quit  the  service." 

"  The  second  portion  of  the  order,  embracing  the  last  two  clauses,  forbids 
the  doing  of  any  act — even  though  it  be  lawful  in  itself~in  furtherance  of 
any  conspiracy  or  combination  to  restrain  either  of  the  railroads  from  freely 
controlling  and  handling  interstate  .commerce,  and  also  forbids  the  ordering, 

1.97 


THE   QUESTION   OF   LAW  AND   ORDER. 


directing,  aiding  or  abetting  any  person  to  commit  any  or  either  of  the  acts 
aforesaid." 

*'  Whether  the  Government  could  properly  file  a  bill  for  such  relief  is  one 
•with  the  question  whether  the  United  States  Circuit  Court  could  properly 
grant  the  injunction  upon  such  a  bill." 

The  Supreme  Court  of  the  United  States  has  passed  affirmatively,  and 
without  a  dissenting  vote,  on  each  of  these  propositions.  It  took  up  the  con- 
tention that  it  is  outside  of  the  jurisdiction  of  a  court  of  equity  to  enjoin  the 
commission  of  crimes,  and  admitted  its  truth,  but  it  held  that  when  there  is 
interference,  actual  or  threatened,  with  property  or  rights  of  a  pecuniary 
nature,  the  jurisdiction  of  a  court  of  equity  arises,  and  is  not  destroyed  by  the 
fact  that  such  interference  is  accompanied  by  or  is  itself  a  violation  of  the 
criminal  law. 

THE  LESSON   OF  THE  STRIKE. 

If  the  railroad  strike  of  1894  brought  home  one  lesson  more  strongly  than 
another,  it  was  that  anarchy  is  not  a  cure  for  defective  legislation  and  that  no 
private  or  public  interest  can  be  so  great  as  to  warrant  a  compromise  with 
violators  of  law.  There  is  much  in  the  strike  and  in  the  position  of  those  who 
condemn  the  suppression  of  its  violence  to  suggest  Lyman  Abbott's  judgment 
of  Napoleon : 

*'  He  was  an  embodiment  of  the  spirit  of  the  French  Revolution,  in  which 
some  of  the  noblest  sentiments  of  love  and  liberty  ever  framed  into  eloquent 
words  stand  in  strange  contrast  with  some  of  the  blackest  and  bloodiest  crimes 
ever  written  in  tragic  deeds.  And  both  serve  as  a  warning  to  the  philosophy 
which  in  our  time  confounds  liberty  and  lawlessness,  which  conceives  a  man 
to  be  good  because  he  has  good  impulses,  or  a  state  to  be  secure  because  it  has 
noble  ideas ;  which  forgets  that  the  lawless  will  of  a  multitude  is  no  better 
than  the  lawless  will  of  an  individual,  and  fondly  imagines  that  a  people  may 
know  no  law  higher  than  their  own  inclinations,  and  yet  the  voice  of  the 
people  be  the  voice  of  God." 

The  merits  of  the  strike  are  not  the  question  at  issue,  it  is  whether  the  law  as 
applied  by  the  Circuit  Court  with  the  unanimous  approval  of  the  Supreme 
Court  of  the  United  States,  should  be  accepted  and  respected  as  the  law  of  the 
land.  Our  system  of  government  knows  no  higher  sanction  than  this,  and  the 
party  which  makes  this  kind  of  authoritative  exposition  of  the  law  the  subject 
of  rancorous  denunciation,  ranges  itself  on  the  side  of  disorder  and  proclaims 
itself  the  propagandist  of  revolution. 

That  there  have  been  abuses  iu  the  administration  as  well  as  in  the  enact- 
ment of  Federal  law;  that  in  this  connection  there  have  been  real  wrongs 
which  ought  to  be  redressed,  as  well  as  fancied  ones,  which  have  been  sincerely 
felt,  no  one  will  deny.     And,  whether  or  not  those  are  such  aa  might  now  fitly 

1.98 


THE  QUESTION  OF  LAW  AND  ORDER. 


be  made  an  issue  of  our  politics,  the  framers  of  the  Chicago  platform  might 
have  rendered  a  real  service  bv  directly  stating  them  and  proposing  a  remedy. 
With  a  depravity  which,  instead  of  stating  wrong  in  order  that  it  may  be 
amended,  criticises  law  only  as  an  invitation  to  law -breaking,  an  order-loving 
people  can  make  no  compromise.  For  any  effective  remedy  of  defects  that 
may  exist  in  the  administration  of  justice  by  the  Federal  Courts,  the  first 
essential  is  that  laws  once  made  shall  be  obeyed.  To  complain  of  wrong 
and  in  the  same  breath  to  suggest  violation  of  law  is  to  obstruct  the  only 
remedy  possible  among  a  civilized  people. 


1.99 


RECORD    OF   THE   DEMOCRATIC  ADMINISTRATION. 

The  just  way  to  judge  an  administration  is  by  its  fidelity  to  the  interests  of 
the  people,  to  the  pledges  of  the  platform  upon  which  a  President  is  elected,  and 
to  the  promises  of  its  chief.  Three  promises  were  contained  in  the  Democratic 
Platform  of  1892.  They  relate  to  the  currency,  the  tariff,  and  to  the  civil  ser- 
vice. 

I.    THE  CURRENCY. 

The  platform  of  1892  denounced  the  Sherman  Silver  Purchase  Act  of  1890 
as  a  "  cowardly  makeshift,  fraught  with  possibilities  of  danger  in  the  future," 
and  demanded  its  speedy  repeal.  Very  soon  after  President  Cleveland's  second 
inauguration  the  menace  of  the  Sherman  Act  culminated  in  the  panic  of  1893. 
A  special  session  of  Congress  was  called,  and  the  act  itself  was  repealed. 

The  platform  then  went  on  to  pledge  the  party  to  "insure  the  maintenance 
of  the  parity  of  the  two  metals,  and  the  equal  power  of  every  dollar  at  all  times 
in  the  markets  and  in  payment  of  debts,  and  we  demand  that  all  paper  cur- 
rency shall  be  kept  at  par  with  and  redeemable  in  such  coin.  We  insist  upon 
th's  policy  as  especially  necessary  for  the  protection  of  the  farmers  and  labor- 
ing classes,  the  first  and  most  defenseless  victims  of  unstable  money  and  a 
fluctuating  currency." 

During  the  war,  and  the  ten  years  that  followed,  this  country  had  full  expe- 
rience of  the  evils  thus  pointed  out  in  the  platform.  The  paper  currency  was 
not  kept  at  par  with  and  redeemable  in  coin.  Its  value  fluctuated  and  the 
farmers  and  the  laboring  classes  sufEered.  No  man  when  he  made  a  bargain  to 
work  for  another,  or  when  he  planned  for  a  crop,  could  tell  what  the  dollar  in 
which  he  was  to  be  paid  would  be  worth  or  what  it  would  buy.  Prices  varied 
as  the  currency  varied,  and  the  people  of  this  country  determined  to  recur  to  the 
well-established  Democratic  policy  of  redeeming  all  paper  currency  in  gold,  or 
in  silver  kept  on  a  parity  with  gold.  In  order  to  provide  for  this  redemption 
it  became  necessary  to  accumulate  gold  in  the  Treasury,  and  accordingly  the 
Resumption  Act  of  January  14,  1875,  authorized  the  Secretary  of  the  Treasury 
to  purchase  gold  and  to  issue,  sell  and  dispose  of  bonds  for  that  purpose. 
This  was  done.  A  stock  of  gold  was  accumulated  in  the  Treasury,  and  on  the 
first  of  January,  1879,  we  resumed  gold  payments.  Meanwhile  the  owners  of 
silver  mines,  the  value  of  whose  product  had  been  diminished  by  the  greatly 
increased  production  of  silver,  endeavored  to  get  a  market  for  the  silver  which 
they  produced  from  the  Government,  and  the  Act  of  February  28,  1878,  was 
passed,  directing  the  purchase  of  two  million  dollars'  worth  of  silver  bullion  per 
month  and  the  coinage  of  the  same  into  silver  dollars.  Silver  certificates  wero 
authorized  to  be  issued  by  the  Treasury  upon  the  deposit  of  these  silver  dollars. 

2.00 


RECORD   OF   THE   DEMOCRATIC   ADMINISTRATION. 

These  purchases  did  not,  however,  maintain  the  market  price  of  silver.  But 
the  silver-producing  States  had  votes,  and  there  were  enough  politicians  in  both 
parties  to  seek  to  secure  those  votes,  and  accordingly,  in  1890,  the  Sherman 
Act  was  passed,  which  provided  for  the  purchase  of  four  million  five  hundred 
thousand  ounces  of  silver  per  month  and  the  issuing  of  government  notes  in 
payment,  which  were  made  redeemable  in  coin.  This  was  supposed  by  many 
to  be  the  total  production  of  silver  in  this  country.  There  were  those  who 
honestly  believed  that  the  purchase  of  this  vast  amount  of  silver  by  the  Gov- 
ernment would  raise  the  price.  It  turned  out,  however,  that  the  quantity  of 
silver  in  the  world  was  practically  unliraited,  that  the  purchases  by  the  Govern- 
ment could  not  maintain  the  price,  which  was  settled  by  fixed  laws  of  supply 
and  demand  that  no  government  can  control,  and  though  this  artificial  market 
raised  silver  in  1890  to  $1.03  an  ounce,  yet  it  steadily  fell  from  that  time  until 
1894,  when  it  sold  for  as  low  as  64  cents  per  ounce. 

Meanwhile  the  agitation  for  the  unlimited  coinage  of  silver  was  kept  up, 
and  business  men,  both  in  this  country  and  abroad,  began  to  realize  the  danger 
of  still  further  concessions  to  the  owners  of  silver  mines,  and  to  the  honest  but 
misguided  men  whom  they  had  persuaded  to  co-operate  with  them.  It  was 
very  well  understood  that  the  free  coinage  of  silver— the  supply  of  silver  being 
unlimited — would  reduce  the  value  of  the  American  dollar  to  the  value  of  the 
silver  contained  in  it,  and  that  it  would  be  perfectly  impossible  for  the  Govern- 
ment, with  free  coinage,  to  maintain  the  parity  of  the  two  metals.  Naturally, 
therefore,  many  who  feared  that  the  Government  would  not  be  able  to  keep 
the  pledge  of  the  Democratic  platform  already  quoted,  began  to  draw  gold 
from  the  treasury.  The  debtors  of  the  Government  ceased  paying  gold  into 
the  treasury,  and  paid  all  their  debts  in  paper  and  silver,  as  debtors  always 
will  if  the  option  is  given  them.  The  creditors  of  the  Government,  on  the 
other  hand,  demanded  from  the  government  gold,  as  creditors  always  will  if 
the  option  is  given  them.  The  result  was  a  steady  drain  upon  the  treasury,  > 
until,  on  the  12th  of  February,  1895,  the  gold  coin  in  the  treasury  was  only 
$51,392,583,  while  the  outstanding  gold  certificates  were  $52,578,529.'^ 

At  this  time,  therefore,  there  was  not  gold  coin  enough  in  the  treasury  to 
pay  the  outstanding  gold  certificates  and  we  had  none  at  all  with  which  to  pay 
the  United  States  notes,  amounting  to  $347,681,016,  not  to  speak  of  the 
coin   notes,  amounting   to    $152,584,417,    issued    under    the  Act    of  1890.3 

1  The  gold  coin  and  bullion  in  the  Treasury  April  30,  1889,  was  $328,203,901.  September 
30,  1894,  It  was  only  $123,665,776.  (Treasury  Report  for  1894,  pages  29,  30) .  During  the  same 
time  the  silver  coin  and  bullion  increased  from  $307,057,392  to  $509,814,353.  Ibid^  p.  .32. 

2  See  Treasury  Report  of  that  date,  published  in  leading  Chicago  and  New  York  papers 
of  the  next  day. 

3  Treasury  Report,  1894,  p.  65.  Of  these  United  States  notes  there  were  counted  as 
available  cash  in  the  Treasury,  February  12, 1895,  $51,143,314.42    See  Report  for  that  day. 

2.01 


EECORD   OF   THE   DEMOCRATIC   ADMINISTRATION. 

The  gold  bullion  in  the  treasury  was  $42,526,127,  makiog-  a  net  gold 
reserve  against  four  hundred  and  fifty  millions  of  paper  payable  on  demand 
of  only  $41,340,181.  During  the  ten  weeks  previous  to  this  date  our  own  peo- 
ple had  drawn  out  in  gold  from  the  Treasury  of  the  Government,  exclusive  of 
that  which  was  exported,  $43,933,913.  The  rate  at  which  gold  was  being 
drawn  out  was  rapidly  increasing,  and  if  something  had  not  been  done  to  pre- 
vent the  draft,  the  whole  amount  in  the  Treasury  would  have  disappeared 
within  a  month,  and  the  Government  would  have  had  nothing  with  which  to 
pay  its  ordinary  debts  but  silver  dollars.  These  certainly  are  legal  tender  for 
all  debts  not  expressed  to  be  paid  in  gold,  but  their  intrinsic  value  is  only  about 
fifty  cents.  The  Government  now  keeps  up  the  credit  of  the  silver  dollar  by 
redeeming  all  coin  notes  in  gold.  But  the  moment  the  Government  ceases  to  do 
this,  and  pays  its  obligations  only  in  silver,  that  moment  the  silver  dollar  will 
be  taken  only  according  to  its  actual  commercial  value,  and  we  shall  have  two 
standards,  just  as  we  had  during  the  war.  The  Government  then  was  compelled 
to  pay,  and  did  pay,  all  its  current  debts  in  paper,  and  this  paper  at  one  time 
during  the  war  was  worth  less  than  forty  cents  on  the  dollar,  measured  by  the 
gold  standard. 

The  fear  of  a  return  to  this  condition  was  general  among  creditors  and 
investors  during  1893  and  1894,  It  was  this  fear  that  palsied  the  manufacturer, 
and  that  cut  down  the  profits  of  the  farmer.  It  was  this  fear  that  closed  fac- 
tories and  threw  men  out  of  employment. 

In  this  emergency,  the  President  of  the  United  States  and  the  Secretary  of 
the  Treasury,  with  a  courage  worthy  of  all  praise,  made  the  contract  with  the 
great  bankers  of  New  York  and  London  by  which  not  only  did  they  agree  to 
furnish  gold  for  the  present  needs  of  the  Government  to  the  amount  of  sixty- 
five  million  dollars,  but  agreed  that  they  would  **  bear  all  the  expenses  and 
inevitable  loss  of  bringing  gold  from  Europe,  hereunder,  and,  as  far  as  lies  in 
their  power,  will  exert  all  financial  influence  and  will  make  all  legitimate 
efforts  to  protect  the  Treasury  of  the  United  States  against  the  withdrawals  of 
gold,  pending  the  complete  performance  of  this  contract." 

Had  it  not  been  for  this  act,  the  Government  would  have  had  nothing  to  pay 
its  debts  with  but  the  silver  coin  and  bullion  in  the  treasury,  and  it  would  have 
been  compelled  to  pay  all  its  salaries  and  contracts  in  silver  and  silver  notes, 
This  means  distinctly  that  we  should  have  gone  into  national  bankruptcy,  and 
paid  our  debts  at  fifty  cents  on  the  dollar.  Our  credit,  individual  and  national, 
would  have  received  a  blow  from  which  it  would  not  have  recovered  for  years. 
The  greatest  sufferers  would  have  been  laboring  men,  wage-earners,  pensioners, 
depositors  in  savings  banks,  and  the  like. 

The  Administration  has  been  censured  by  the  advocates  of  silver  coinage 
for  the  issue  of  these  bonds,  and  for  a  subsequent  issue  which  was  made  neces- 
sary by  the  subsequent  reduction  of  the  gold  in  the  treasury.     In  what  the  Ad- 

2.02 


RECORD    OP   THE    DEMOCRATIC   ADMINISTRATION. 


ministration  has  done  it  was  not  only  carrying  out  the  pledges  of  the  platform, 
but  the  pledge  of  two  statutes  of  the  United  States : 

'  *  It  being  the  established  policy  of  the  United  States  to  maintain  the  two 
metals  on  a  parity  with  each  other  upon  the  present  legal  ratio,  or  such  ratio  as 
may  be  provided  by  law."  Act  of  July  14,  1890  (86  United  States  Stat,  at 
Large,  89). 

This  pledge  was  repeated  by  the  Act  of  November,  1893  (27  ibid.  p.  4): 

"  And  it  is  hereby  declared  to  be  the  policy  of  the  United  States  to  continue 
the  use  of  both  gold  and  silver  as  standard  money,  and  to  coin  both  gold  and 
silver  into  money  of  equal  intrinsic  and  exchangable  value,  such  equality  to  be 
secured  through  international  agreement,  or  by  such  safeguards  of  legislation 
as  will  insure  the  maintenance  of  the  parity  in  value  of  the  coins  of  the  two 
metals,  and  the  equal  power  of  every  dollar  at  all  times  in  the  markets  and  in 
the  payment  of  debts.  And  it  is  hereby  further  declared  that  the  efiforts  of 
the  Government  should  be  steadily  directed  to  the  establishment  of  such  a  safe 
system  of  bi-metallism  as  will  maintain  at  all  times  the  equal  power  of  every 
dollar  coined  or  issued  by  the  United  States,  in  the  markets  and  in  the  payment 
of  debts." 

What  was  meant  by  tho  issue  of  bonds  for  the  purchase  of  gold  is  simply  this : 
The  Government  had  solemnly  pledged  itself  ' '  to  maintain  at  all  times  the  equal 
power  of  every  dollar  coined  or  issued  by  the  United  States  in  the  markets  and  in 
payment  of  debts. "  To  be  false  to  this  pledge  would  have  made  every  paper  dollar 
issued  by  the  United  States  redeemable  only  in  silver  dollars.  These  silver  dollars 
were  worth  only  about  fifty  cents.  As  long  as  the  Government  keeps  them  on  a  par 
with  the  gold  dollar  by  redeeming  its  paper  in  gold  at  the  option  of  the  holder, 
so  long  one  dollar  has  purchasing  power  equal  to  that  of  the  other.  But  the 
moment  that  this  act  of  the  Government  ceases,  that  moment  the  silver  dollar 
becomes  worth  just  what  the  silver  in  it  is  worth,  and  no  more.  That  would 
have  meant  that  every  pension,  every  laboring  man,  every  farmer,  every  busi- 
ness man  in  the  country,  when  paid  for  what  he  sold  or  for  his  work,  would 
have  been  paid  in  dollars  woith  only  half  what  they  were  when  the  bargain  was 
made.  Mr.  Cleveland  was  the  only  person  in  the  country  who  had  the  power 
to  save  our  people  from  this  disgrace  and  loss.  To  do  it  he  made  a  contract 
by  which  those  who  had  gold  sold  it  to  the  Government  and  received  in  pay- 
ment government  bonds. 

In  this  same  agreement  the  oJBfer  was  distinctly  made  to  Congress  that  they 
might  save  the  people  sixteen  million  dollars  if  they  would  authorize  payment 
for  the  gold  thus  bought  in  three  per  cent,  bonds,  containing  an  express  agree- 
ment to  pay  the  principal  and  interest  in  United  States  gold  coin  of  the  present 
standard  of  weight  and  fineness.  This  offer  Congress  refused.  The  bonds  were 
paid  for  in  the  four  per  cent,  bonds  authorized  by  previous  statutes,  which 
are  payable  in  coin,  but  not  "specifically  in  gold  coin."    Thus  the  free-silver 

2.03 


RECORD    OF   THE   DEMOCRATIC   ADMINISTRATION. 


agitation  cost  us  sixteen  million  dollars  at  one  stroke.  If  this  lesson  should 
teach  our  people  that  a  fixed  standard  for  the  payment  of  debts  is  the  best  pol- 
icy, it  will  be  worth  all  it  cost. 

In  other  words,  when  the  Chicago  platform  condemns  the  issue  of  bonds 
in  time  of  peace,  it  means  that  instead  of  taking  money  from  those  who  are 
able  to  lend  it  to  the  Government  in  order  to  enable  the  Government  to  pay 
its  debts  and  keep  its  promise,  it  would  disgrace  the  Government  by  violating 
its  promise,  and  ruin  the  people  by  compelling  them  to  accept  in  payment  dollars 
really  only  worth  fifty  cents. 

When  this  platform  speaks  of  a  syndicate  of  bankers  it  simply  means  men 
who  have  money  to  sell.  The  Government  needed  money  and  naturally  went 
to  those  who  had  it  to  sell.  If  it  needed  wheat  it  would  go  to  the  dealers  in 
wheat.  If  it  needed  beef  it  would  go  to  the  dealers  in  beef.  When  it 
needed  money  it  naturally  went  to  those  who  had  money.  The  money  which  it 
got  was  for  the  benefit  of  every  American  citizen,  and  more  for  that  of  the 
poor  than  of  the  rich,  because  they  needed  it  most. 

II.    THE   TARIFF. 

The  Democratic  platform  of  1893  demanded  that  the  collection  of 
tariff  taxes  "shall  be  limited  to  the  necessities  of  the  Government  as  hon- 
estly and  economically  administered."  Mr.  Cleveland's  ringing  message  of 
1887  had  not  been  forgotten.  The  Democratic  party  in  the  House  of  Repre- 
resentatives,  acting  in  full  co-operation  with  the  Adminiatration,  passed  a  bill 
which  responded  to  this  pledge  of  the  platform.  A  small  coterie  of  Democrats 
in  the  Senate,  some  of  whom  are  now  supporters  of  Bryan,  compelled  an 
amendment  of  this  bill  which  diminished  its  value.  The  House  was  com- 
pelled to  submit,  but  the  bill  as  passed  was  a  great  improvement  on  the 
McKiiiley  tariff.  It  reduced  or  repealed  the  taxes  on  raw  material,  and  in  this 
way  diminished  the  cost  of  the  necessaries  of  life  and  increased  the  market 
for  American  manufactured  products,  both  at  home  and  abroad.  The  charge 
is  often  made  against  this  bill  that  it  did  not  produce  suificieut  income.  The 
answer  to  this  is  twofold : 

1.  The  income  tax  which  it  did  contain  would  have  produced  sufficient 
income,  even  for  the  large  expenditure  which  has  since  been  voted  by  Congress. 
This  was  declared  unconstitutional  by  the  United  States  Supreme  Court,  The 
Republican  party  made  this  a  pretext  in  the  present  Congress  for  increasing 
protective  taxes,  and  refused  to  impose  revemie  taxes  which  would  have  met 
the  deficiency  in  revenue.  Failing  to  do  this,  their  plain  duty  was  to  reduce 
expenditure  so  as  to  keep  within  the  government  income.  Instead  of  this 
they  passed  an  extravagant  River  and  Harbor  Bill,  which  was  vetoed  by  the 
President,  but  which  they  succeeded  in  passing  over  his  veto.  It  would  be 
absurd  for  a  man  who  had  an  income  of  over  ten  thousand  dollars  a  year,  but 

2.04 


RECORD    OF   THE   DEMOCRATIC   ADiilNlSTRATION. 


who  extravagantly  spent  fifteen  thousand,  to  complain  of  the  smallness  of  his 
income.  The  honest  thing  for  him  to  do  would  be  to  reduce  expenses  and 
keep  within  his  means.  The  failure  to  do  this  is  not  the  fault  of  the  Demo- 
cratic Administration.  That  did  all  that  an  administration  could  to  keep  down 
the  expenses  of  the  Government.  But  Congress  alone  has  power  to  make 
appropriations,  and  it  is  Congress  that  has  run  the  nation  in  debt  by  expenditures 
far  beyond  its  income. 

III.    THE  CIVIL   SERVICE. 

The  Democratic  platform  of  1892  declared  "  public  office  is  a  public 
trust."  It  reaffirmed  the  "declaration  of  the  Democratic  National  Conven- 
tion of  1876  for  the  reform  of  the  Civil  Service"  and  called  for  "the  honest 
enforcement  of  all  the  laws  regulating  the  same."  It  pledged  the  Democratic 
party  to  reform  "abuses  which  threatened  individual  liberty  and  local  self- 
government."  This  pledge  the  President  has  amply  kept.  Early  in  the 
administration  he  brought  within  the  operation  of  the  Civil  Service  laws  the 
Agricultural  Department  and  the  Mint,  and  greatly  extended  their  application 
to  the  Indian  service  and  in  the  Customs  service.  By  more  recent  orders  he  has 
extended  the  operation  of  these  laws  in  all  branches  of  the  service,  and  has 
thrown  open  to  public  competition  many  of  the  most  important  places  in  the 
Government.     What  all  this  means  is  simply  this  : 

That  the  appointment  to  about  eighty- five  thousand  two  hundred  offices  of 
the  U.  S.  Government  shall  henceforward  be  made,  not  for  partisan  service, 
but  for  merit,  and  that  those  who  serve  the  Government  faithfully  shall  have 
an  opportunity  to  be  promoted  instead  of  seeing  persons  of  no  experience  in  the 
public  service  appointed  over  their  head.  This  offers  a  public  career  to  every 
American  citizen,  however  humble  his  birth,  who  is  competent  to  serve  his 
country,  and  gives  him  security  of  tenure  by  taking  away  the  temptation  to  re- 
move him  and  appoint  somebody  else  in  his  place  for  political  reasons. 

The  Chicago  platform  declares,  "  We  are  opposed  to  life  tenure  in  the  pub- 
lic service,"  and  also  declares  for  "fixed  terras  of  office."  These  phrases  can 
only  mean  "a  clean  sweep"  at  the  end  of  every  four  years.  It  is  obvious 
that  the  partisans  of  Bryan,  who  falsely  called  themselves  Democrats,  are  hun- 
gry for  the  spoils  of  office.  The  same  selfishness  that  leads  the  silver-mine 
owners  to  demand  a  market  for  their  product  from  the  Government  which  is 
given  to  no  one  else,  leads  their  other  leaders  to  demand  the  turning  out  of  the 
faithful  servants  of  the  Government  and  the  appointment  of  themselves. 

It  must  be  plain,  therefore,  to  every  impartial  observer,  that  the  present 
Administration    has    loyally  kept  the   pledges  of  the   platform  upon  which 
Grover  Cleveland  was  elected,  and  that  the  Chicago  platform,  as  expounded  by 
its  candidate,  betrays  them  all.     It  is  true  that  this  platform  contains  a  tariff 
reform  plank,  but  it  is  equally  true  that  Ivlr.  Bryan  declares  that  the  question 

2  05 


RECORD   OF   THE   DEMOCRATIC   ADMINISTRATION. 

of  the  tariff  is  not  involved  in  the  present  election,  and  that  its  reform  is  no 
concern  of  his.  It  demands  the  free  coinage  of  silver  virhich  would  inevitably 
bring  the  country  to  a  single  standard,  with  a  dollar  worth  only  about  fifty 
cents.  This  would  not  only  violate  the  provisions  of  the  U»  S.  statutes  already 
quoted,  but  the  pledges  of  the  Democratic  party.  It  is  plain,  therefore,  that 
the  Bryan  party  is  no  more  entitled  to  the  name  of  Democrat  than  pirates 
would  be  to  the  title  of  honest  mariners  who  had  stolen  a  ship  and  hoisted  its 
flag  at  the  peak.  The  true  Democrats  of  the  party  must  be  loyal  to  the 
principles  of  their  party  and  preserve  it  for  the  lasting  welfare  of  the  American 
people. 


2.06 


THE  NATIONAL  FINANCES,    1888-1896. 

The  claim  has  been  made  that  the  revenue  yielded  by  the  McKinley  tariff 
act  was  sufficient  for  all  the  expenses  of  the  Government,  and  that  it  was  only 
after  the  enactment  of  the  Wilson  act  that  a  deficit  began  to  appear.  In  point 
of  fact,  the  immediate  effect  of  the  McKinley  act  was  a  great  reduction  of 
revenue.  The  return  it  yielded  became  year  by  year  less  and  less  adequate  to 
produce  a  surplus,  and  the  last  year  of  the  operation  showed  a  large  deficit. 

During  the  fiscal  year  1888 — ended  June  30,  1888 — the  revenues  of  the 
government  were  $111,341,273  in  excess  of  its  expenditures. 

During  the  fiscal  year  1889— ended  June  30,  1889 — the  revenues  were 
$87,761,080  in  excess  of  the  expenditures. 

During  the  fiscal  year  1890— ended  June  30,  1890— the  revenues  were 
$85,040,271  in  excess  of  the  expenditures. 

The  so-called  McKinley  Tariff  Act  took  effect  on  the  6th  day  of  October, 
1890,  and  during  the  fiscal  year  1891 — ended  June  30,  1891 — the  revenues 
were  $26,838,541  in  excess  of  the  expenditures. 

During  the  fiscal  year  1892 — ended  June  30,  1892 — the  revenues  were 
$9,914,453  in  excess  of  the  expenditures. 

During  the  fiscal  year  1893 — ended  June  30,  1893— the  revenues  were 
$2,341,674  in  excess  of  the  expenditures. 

During  the  fiscal  year  1894— ended  June  30,  1894 — the  expenditures  ex- 
ceeded the  revenue  to  the  amount  of  $69,803,260.58,  notwithstanding  the 
fact  that  the  expenditures  of  the  Government  were  $15,952,674  less  than  in 
the  preceding  year.  The  McKinley  Bill  was  in  force  during  the  whole  of 
the  fiscal  year  1894. 

The  so-called  Wilson  Tariff  Act  took  effect  on  the  28th  day  of  August,  1894, 
and  the  revenues  for  the  fiscal  year  1895 — ended  June  30,  1895 — were  $42,- 
805,223.18  less  than  the  expenditures;  and  during  the  fiscal  year  1896— ended 
June  30,  1896— the  revenues  were  $25,203,245.70  less  than  the  expenditures. 

Receipts  from  Custonu  and  Total  Beceipts  frojn  All  Sources  Under  McKinley 

Act 

CUSTOMS.  ALL  SOURCES. 

Twelve  months  ending  Sept.  30,  1891. .  $196,794,357  89  $371,932,536  81 

Twelve  months  ending  Sept.  30,  1892. .  185,838,859  19  364,847,501  72 

Twelve  months  ending  Sept.  30,  1893..  189,182,905  46  365,534,609  55 

Eleven  months  ending  Aug.  31,  1894. .  112,590,939  77  292,078,342  91 

2.07 


THB   NATIONAL  FINANCES.   lBS8-180e. 


Receipts  from  Customs  and  Total  Receipts  from  All  Sources  Tinder  Wilson  Act. 

CUSTOMS.  ALL  SOURCES. 

Twelve  months  ending  Aug.  31,  1895. .    $161,201,169  35  $295,061,022  16 

Twelve  months  ending  Aug.  31,  1896. .      154,218,813  94  321,726,319  37 

CONDITION  OF  THE  TREASURY  MARCH   1,    1889,   AND  MARCH  1,    1893. 

There  has  been  a  copious  amount  of  misrepresentation  as  to  the  condition 
of  the  United  States  Treasury  in  the  four  years  between  the  end  of  President 
Cleveland's  first  term  and  the  beginning  of  his  second.  The  following  figures 
show  how  serious  was  the  depletion  of  available  funds  which  took  place  during 
that  time. 

On  the  1st  day  of  March,  1889,  the  beginning  of  President  Harrison's  ad- 
ministration, the  available  funds  in  the  Treasury,  exclusive  of  the  $100,000,000 
gold  reserve,  were  as  follows  : 

Agency  account $64,502,445  02 

Net  balance  in  Tieasury 165,846,471  10 

Total $230,346,916  12 

On  the  1st  day  of  March,  1893,  the  beginning  of  the  present  administration, 
the  available  funds  in  the  Treasury,  exclusive  of  the  $100,000,000  gold  reserve, 
were  as  follows  : 

Agency  account $38,365,832  90 

Net  balance  in  Treasury 24,084,742  28 

Total $62,450,575  18 

In  addition  to  the  ordinary  revenues  received  during  President  Harrison's 
administration,  there  was  covered  into  the  Treasury  $54,207,975.75,  which  had 
been  held  in  trust  under  the  law  as  a  fund  for  the  redemption  of  national  bank 
notes.  This  proceeding  was  authorized  by  the  Act  of  July  14, 1890,  commonly 
known  as  the  Sherman  Act. 

PUBLIC  DEBT  PAID  BY  THE   TWO  ADMINISTRATIONS. 

The  following  may  serve  as  a  corrective  to  current  misstatements  in  regard 
to  the  share  borne  by  a  Democratic  administration  in  the  reduction  of  the 
public  debt. 

From  the  1st  day  of  March,  1885,  the  beginning  of  Mr.  Cleveland's  first 
administration,  to  March  1,  1889,  the  public  debt  was  reduced  $341,448,- 
449.20;  and  from  March  1, 1889,  the  beginning  of  Mr.  Harrison's  administra- 
tion, to  March  1.  1893,  the  reduction  of  the  public  debt  was  $236,527,666.10. 

The  amourii  of  free  gold  in  the  Treasury  on  the  7th  day  of  March,  1893, 
when  the  present  Secretary  took  charge  of  the  Department,  was  $100,982,410. 

2.08 


THE   NATIONAL   FINANCES,    18&8-1898.  "^  ^  T 

VALUES  OF   IMPORTS  AND  EXPORTS. 

The  claim  has  been  made  that  one  result  of  the  operation  of  the  Wilson 
Tariff  Act  has  been  an  enormous  increase  of  imports  and  a  great  shrinkage  of 
exports.  How  little  ground  there  is  for  such  a  statement  may  be  seen  from 
the  following  statement : 

Exports, 
Imports.        Dom.  and  Foreign. 

Oct.  1,  1890,  to  Sept.  30,  1891 ; . .  $824,716,842  $928,362,015 

Oct.  1,  1891,  to  Sept.  30,  1892 837.280,798  998  226,775 

Oct.  1,  1892,  to  Sept.  30,  1893 830,150,318  876,332,434 

*  Oct .  1,  1893,  to  Aug.  31,  1894 603,865,896  790,706,509 

Values  of  Imports  and  Exports  of  Merchandise  Under  the  Wilson  Tariff  Act. 

Sept.  1,  1894,  to  Aug.  31,  1895 $759,108,416         $806,670  050 

*  Sept.  1,  1895,  to  July  31, 1896 687,695,637  837,802,519 

Excess  of  Exports  of  Merchandise  alone,  and  of  Merchandise  and  Silver,  Under 

McKirUey  Act. 

Merchandise  and 
Merchandise.  Silver. 

Oct.  1,  1890,  to  Sept.  30,  1891 $98,645,173  $103,537,310 

Oct.  1,  1891.  to  Sept.  30,  1892 160,945.977  175,091.707 

Oct.l,  1892,  to  Sept.  30,  1893 46,182,116  68,672,811 

*  Oct.  1,  1893,  tc  Aug.  31,  1894 186,840,613  219,546,927 

Excess  of  Exports  of  Merchandise  alone,  and  of  Merchandise  and  Silver,  Under 

Wilson  Act. 

Merchandise  and 
Merchandise.  Silver. 

Sept.  1,  1894,  to  Aug.  31,  1895 $47,561  634  $86,960,538 

*  Sept.  1,  1895,  to  July  31,  1896 150,106,882  194,435,730 

Annunl  Average  Excess  of  Exports  of  Merchandise  Alone. 

Under  McKinley  Act  of  1890 $123,153,470 

Under  Wilson  Act  of  1894 98,834,258 

Annual  Average  Excess  of  E-xports  of  Merchandise  and  SilDer. 

Under  McKinley  Act  of  1890  $141,712,189 

Under  Wilson  Act  of  1894 140,698,134 

*  Eleven  months. 
2.00 


THE  NATIONAL  FINANCES,  1888-1898. 


Commercial  ratio  of  silver  and  gold 


1687-1895. 


[Note— From  1687  to  1832  the  ratios  are  taken  from  Dr.  A.  Soetbeer  ;  from  1833  to  1878 
from  Pixley  and  Abell's  tables,  and  from  1879  to  1894  from  daily  cablegrams  from  London  to 
the  Bureau  of  the  Miut.] 


Year. 

Ratio. 

Year. 

Ratio. 

Year. 

Ratio. 

Year. 

Ratio. 

Year. 

Ratio. 

Yea 

r.    Ratio. 

1687... 

14.94 

1723.. 

15.20 

1759.. 

14.15 

.  1795.. 

15.55 

1831.. 

15.72 

1867 

...    15.57 

1688... 

14.94 

1724.. 

15.11 

1760.. 

14.14 

1796.. 

15.65 

1832.. 

15.73 

1868 

..    15.59 

1689... 

15.0^ 

1725.. 

15.11 

1761.. 

14.54 

1797.. 

15.41 

1833.. 

15.93 

1869 

..    15.60 

1690... 

15.02 

1726.. 

15.15 

1762. 

15.27 

1798.. 

15.59 

1834.. 

15.73 

1870 

.      15.57 

1691... 

14.98 

1727.. 

15.24 

1763.. 

14.99 

1799.. 

15.74 

1835.. 

15.80 

1871 

..    15.57 

1692... 

14.92 

1728.. 

15.11 

1764. 

14.70 

1800.. 

15.68 

1836.. 

15.72 

1872 

..    15.63 

1693. . . 

14.83 

1729. 

14.92 

1765.. 

14.83 

1801.. 

15.46 

1837- 

15.83 

1873 

..    15.92 

1694... 

14.87 

1730.. 

14.81 

1766.. 

14.80 

1802.. 

15.26 

1838.. 

15.85 

1874 

..    16.17 

1695... 

15.02 

1731.. 

14.94 

1767.. 

14.85 

1803.. 

15.41 

1839.. 

15.62 

1875 

..    16.59 

1696. . . 

15.00 

173-2.. 

15.09 

1768.. 

14.80 

1804.. 

15.41 

1840.. 

15.62 

1876 

..    17.88 

1697... 

15.20 

1733.. 

15.18 

1769.. 

14.72 

1805.. 

15.79 

1841.. 

15.70 

1877 

..    17.22 

1698... 

15.07 

1734.. 

15.39 

1770.. 

14.62 

1806.. 

15.52 

1842.. 

15.87 

1878 

17.94 

1699. . . 

14.94 

1735.. 

15.41 

1771.. 

14.66 

1807.. 

15.43 

1843 

15.93 

1879 

..    18.40 

1700... 

14.81 

1736.. 

15.18 

1772.. 

14.52 

1808.. 

16.08 

1844.. 

15.85 

1880 

..    18.05 

1701... 

15.07 

1737.. 

15.02 

1773.. 

14.62 

1809.. 

15.96 

1845.. 

15.92 

1881 

..    18.16 

1702... 

15.52 

1738.. 

14.91 

1774.. 

14.62 

1810.. 

15.77 

1846.. 

15.90 

1882 

..    18.19 

1703... 

15.17 

1739.. 

14.91 

1775.. 

14.72 

1811.. 

15.53 

1847. . 

15.80 

1883 

..    18.64 

1704... 

15.22 

1740.. 

14.94 

1776.. 

14.55 

1812.. 

16.11 

1848.. 

15.85 

1884 

..    18.57 

1705... 

15.11 

1741.. 

14.92 

1777.. 

14.54 

1813.. 

16.25 

1849.. 

15.78 

1885 

..    19.41 

1706... 

15.27 

1742.. 

14.85 

1778.. 

14.68 

1814.. 

15.04 

1850.. 

15.70 

1886 

..    20.78 

1707... 

15.44 

1743.. 

14.85 

1779.. 

14.80 

1815. . 

15.26 

1851.. 

15.46. 

1887 

..    21.13 

1708... 

15.41 

1744.. 

14.87 

1780.. 

14.72 

1816.. 

15.28 

1852.. 

15.59 

1888 

..    21.99 

1709... 

15.31 

1745.. 

14.98 

1781.. 

14.78 

1817.. 

15.11 

1853.. 

15.83 

1889 

.     22.10 

1710... 

15.22 

1746.. 

15.13 

1782.. 

14.42 

1818.. 

15.35 

1854.. 

15.33 

1890 

..    19.76 

1711... 

15.29 

1747.. 

15.26 

1783.. 

14.48 

1819.. 

15.33 

1855.. 

15.38 

1891 

..    20.92 

1712. . . 

15.31 

1748.. 

15.11 

1784.. 

14.70 

1820  . 

15.62 

1856.. 

15.38 

1892 

..    23.72 

1718... 

15.24 

1749.. 

14.80 

1785.. 

14.92 

1821.. 

15.95 

1857.. 

15,27 

1893 

..    26.49 

1714. . . 

15.13 

1750.. 

14.55 

1786.. 

14.96 

1822.. 

15.80 

1858.. 

15.38 

1894 

..    32.56 

1715. . . 

15.11 

1751.. 

14.39 

1787.. 

14.92 

1823.. 

15.84 

1859.. 

15.19 

1895 

..    31.60 

1716... 

15.09 

1752.. 

14.54 

1788.. 

14.65 

1824. 

15.82 

I860.. 

15.29 

1896 

(6 

1717. . . 

15.13 

1753.. 

14.54 

1789.. 

14.75 

1825. 

15.70 

1861.. 

15.50 

montl 

is)    30.32 

1718... 

15.11 

1764.. 

14.48 

1790.. 

15.04 

1826.. 

15.76 

1862.. 

15.35 

1719... 

15.09 

1755.. 

14.68 

1791.. 

15.05 

1827. 

15.74 

1863.. 

15.37 

1720. . . 

15.04 

1756.. 

14.94 

1792.. 

15.17 

1828  . 

15.78 

1864  . 

15.37 

1721... 

15.05 

1757.. 

14.87 

1793. 

15.00 

1829.. 

15.78 

1865.. 

15.44 

1722... 

15.17 

1758.. 

14.85 

1794.. 

15.37 

1830.. 

15.82 

1866.. 

15.43 

2.10 


THE   NATIONAL   FINANCES,    1888-1896. 


*'  16  TO   1." — MINT  DIRECTOR  PRESTON'S  EXPLANATION. 

Director  of  the  Mint  Preston  has  issued  the  following  statement  of  the 
coinage  ratio  between  gold  and  silver  : 

*'  All  standard  silver  dollars  coined  by  the  mints  of  the  United  States  since 
the  passage  of  the  act  of  January  18,  1837,  have  been  coined  in  the  ratio  of  1  to 
15.9884— generally  called  the  ratio  of  1  to  16,  15.9884  being  very  nearly  16. 
Still,  to  reach  accurate  results,  the  former  and  not  the  latter  figure  must  be 
used  in  calculation.  The  ratio  is  obtained  in  this  way :  The  silver  dollar  con- 
tains 371 .25  grains  of  pure  silver,  and  the  gold  dollar  23.33  grains  of  pure  gold. 
If  you  divide  371.25  by  23.33  you  will  get  the  ratio  of  weight  between  a  gold 
dollar  and  a  silver  dollar — that  is,  15.9884.  ^ 

It  is  true  that  to  be  on  a  par  with  gold  silver  would  (at  our  ratio)  be  worth 
$1.3929.  The  reason  is  this  :  A  gold  dollar  contains  33.33  grains  of  pure  gold. 
In  an  ounce,  or  480  grains,  of  gold,  there  are  as  many  dollars  as  33.32  is  con- 
tained times  in  480  grains.  If  you  divide  480  by  33.33  you  get  $30.67,  the 
number  of  dollars  that  can  be  coined  out  of  an  ounce  of  pure  gold  ;  in  other 
words,  the  money  equivalent  of  one  ounce  of  gold  or  of  15.9884  ounces  of  silver 
at  the  ratio  of  1  to  15.9884.  Now,  if  15.9884  ounces  of  silver  be  worth  $30.67, 
one  ounce  will  be  worth  $1.2929,  as  you  can  prove  by  simple  division.  The 
same  result  is  obtained  by  dividing  480  grains,  or  one  ounce,  of  silver  by  371.35, 
the  number  of  grains  of  pure  silver  in  a  standard  silver  dollar,  at  the  ratio  of 
1  to  15.9884,  which  gives  $1.2929. 

Sixteen  ounces  of  pure  silver  will  coin  a  little  more  than  one  ounce  of 
gold;  15.9884  ounces  of  silver  will  coin  exactly  the  same  amount  of  money  as 
one  ounce  of  gold — that  is,  $20. 67.  You  can  prove  this  by  dividing  15.9881 
ounces  by  371.25  grains.  The  operation  is  as  follows  :  15.9884  multiplied  by 
480,  divided  by  371.35,  equals  $20,674.  It  is  not  true  that  sixteen  ounces  of 
silver  will  coin  only  $16.80  at  the  ratio  of  1  to  16. 

As  will  be  seen  above,  one  ounce  of  silver  will  coin  $1.3939.  Multiplying 
$1.3939  by  16  gives  $20.68.  You  can  make  the  same  result  in  another  way  : 
Sixteen  ounces  troy,  or  7,680  grains,  divided  by  371.25  gives  the  number  of  sil- 
ver dollars  that  can  be  coined  out  of  sixteen  ounces  of  silver ;  7,680  divided  by 
371.25  equals  $20.68." 


3.11 


A    FREE    COINAGE    CATECHISM.* 


'T'HE  purpose  of  this  series  of  questions  and  answers  is  to  put,   in  simple 
form,  the  problems  raised  by  the  free-coinage  controversy,  with  a  plain 
answer  to  each.     All  statistical  facts  given  are  transcribed  from  offlcia 
publications. 

THE  MONEY  SUPPLY, 

Q.  What  is  the  fundamental  claim  of  the  free-coinage  advocates?  A 
They  claim  that  the  amount  of  money  in  circulation  has  been  decreasing  since 
the  demonetization  of  silver,  and  that  this  decrease  has  caused  a  general  fall  in 
prices. 

Q.  Is  it  true  that  the  money  supply  has  been  decreasing  ?    A.  it  is  not. 

Q.  What  are  the  facts  ?  A.  So  far  as  the  United  States  is  concerned,  there 
has  been  an  enormous  increase.  In  1860  the  money  in  circulation  in  this  coun- 
try was  $443,102,477;  in  1872  it  was  $738,309,549;  by  the  Treasury  bulletin  at 
the  opening  of  July,  1896,  it  was  $1,509,725,200. 

Q.  Can  you  give  the  details?    A.  Certainly.    Here  they  are: 

Money  in  Circulation  July  1, 1872. 

State  bank  notes $1,700,935 

Fractional  currency 36,402,929 

United  States  notes 346,168,680 

National  bank  notes 329,037,005 

$713,309,549 
Add  specie  in  circulation  on  the  Pacific  Coast 25,000,000 

$738,309,549 
Money  in  Circulation  July  1,  1896. 

Gold  coin $456,128,483 

Silver  dollars 52.175,998 

Small  silver 59,999,805 

Gold  certificates 42.320,759 

Silver  certificates 331,259,509 

Treasury  notes  of  1890 95,217,361 

United  States  notes 225,451,358 

Currency  certificates 31,840,000 

National  bank  notes , 215,331,927 

$1,509,725,200 

♦Revised  and  enlarged  edition,  reprinted  by  permissiin  from  "The  Evening  Post." 
Copies  in  envelope  size  can  be  had  at  2  cents  a  copy  (postage  1  cent  for  2  copies),  by  addressing 
Brening  Post  Publishing  Co.,  206-210  Broadway,  New  York. 

8.01 


A. FREE  COINAGE  CATECHISM. 


Q  What  does  this  show?  A.  It  shows  that  our  money  supply  has  in 
creased  240  per  cent,  as  compared  with  1860,  and  104  per  cent,  as  compared 
with  1872. 

Q.  Has  the  money  supply  increased  faster  than  the  population?  A.  Very 
much  faster. 

Q.  How  do  you  prove  this?  A.  By  dividing  the  total  money  in  circulation 
at  each  date  by  the  total  population  of  the  country  at  the  same  date,  and  thus 
finding  the  circulation  per  capita. 

Q.  What  does  such  a  process  show?  A.  The  per  capita  circulation  of  the 
the  United  States  on  July  1,  1860,  was  $1406;  on  July  1,  1872,  it  was  $18.70; 
at  the  opening  of  July,  1896,  it  was  $21.15. 

Q  But  has  not  the  money  supply  of  the  world  at  large  been  decreasing? 
A.  On  the  contrary,  it  has  been  increasing  rapidly. 

Q.  How  is  this  proved?    A.  By  the  statistics  of  new  gold  production. 

Q.  How  large  has  this  production  been?  A.  The  reports  of  the  Director 
of  the  Mint,  which  are  acknowledged  authority,  show  that  from  1873  to  1894, 
inclusive,  the  world's  total  new  gold  production  has  been  $2,526,834  900. 

Q.  Is  this  new  product  of  gold  increasing  or  decreasing?  A.  It  is  increas- 
ing with  enormous  rapidity. 

Q.  Give  the  figures.  A.  In  1873  the  world's  gold  production  was  $96,200,- 
000;  in  1880  it  was  $106,436,800.  In  the  year  1890  it  was  $118,849,000.  In 
1894  it  was  $180,626,100.  For  1895  it  was  $203,000,000,  and  the  mint  estimate 
for  1896  is  $220,000,000. 

Q.  What  does  this  mean  ?  A.  It  means  that  the  amount  of  gold  annually 
added  to  the  world's  money  supply  has  more  than  doubled  in  the  last  twenty- 
three  years. 

Q.  Is  not  this  annual  rate  of  production  liable  to  decrease?  A.  On  the 
contrary,  all  experts  in  the  American,  Australian,  and  South  African  gold 
fields  look  for  a  further  and  very  heavy  increase  over  the  present  rate  of  pro- 
duction. 

Q,  But  has  not  the  disuse  of  silver  with  full  coinage  facilities  cut  down 
the  total  annual  addition  to  the  world's  metallic  money  supply?    A.  It  has  not. 

Q.  Why?  A.  In  1873  the  world's  gold  production  was  $96,200,000;  its 
silver  production,  $81,800,000;  total,  $178,000,000.  Last  year  the  production  of 
gold  alone  was  $203,000,000. 

Q.  Was  not  the  combined  annual  production  of  gold  and  silver  larger 
than  this  at  the  time  of  the  Calif ornian  and  Australian  gold  discoveries?  A.  It 
was  not. 

Q.  What  was  the  highest  record  of  that  period?  A.  Between  1856  and 
1860,  the  world's  average  annual  production  of  gold  was  $134,083,000;  of 
silver,  $37,618,000;  total,  $t71,701,000;  or  less,  by  $31,300,000,  than  last  year's 
production  of  gold  alone. 

3.02 


A  FREE  COINAGE  CATECHISM. 


Q.  What  are  we  to  say,  then,  of  the  argument  that  the  money  supply, 
since  silver  free  coinage  was  abandoned,  has  been  contracting?  A.  That  it  is 
utterly  false  as  applied  to  the  world  at  large,  and  especially  so  as  applied  to 
the  United  States. 

THE  FALL  IN  PRICES. 

Q.  Is  it  true,  nevertheless,  that  the  prices  of  wheat  and  many  other  farm 
products  have  fallen  heavily?    A.  It  is. 

Q.  How  are  such  declines,  in  wheat  for  instance,  to  be  explained?  A. 
By  the  enormously  rapid  increase  in  grain-growing  area  throughout  the 
world. 

Q.  Has  this  increase  been  especially  rapid  since  1873?  A.  The  increase  in 
grain-growing  area  in  this  period,  especially  in  North  America,  South 
America,  and  Asia,  has  never  been  approached  in  any  equal  period  in  the  his- 
tory of  the  world. 

Q.  How  do  we  judge  of  actual  competition  in  the  sale  of  wheat?  A.  By 
the  supplies  thrown  annually  on  the  world's  great  distributing  markets. 

Q.  What  market  in  particular?  A.  England,  where  most  of  the  buying 
nations  go  to  purchase  their  grain. 

Q.  What  are  the  figures?  A.  As  recently  as  1880  Great  Britain  imported, 
for  consumption  and  reexport,  55.261,924  hundredweight  of  wheat— a  large 
increase  over  the  preceding  annual  average.  In  1895  it  imported  81,749,955 
hundredweight. 

Q.  What  has  made  possible  this  remarkable  increase  in  wheat  production? 
A.  The  exceedingly  rapid  development  of  transportation  facilities  in  newly 
cultivated  grain  countries;  among  tbem  India,  Russia,  and  the  Argentine 
Republic. 

Q.  Has  there  been  an  increase  in  the  United  States  itself?  A.  An  enor- 
mous increase. 

Q.  How  large?  A.  In  1875  there  were  26,381,512  acres  of  wheat  culti- 
vated in  this  country;  in  1891  there  were  39,916,897,  an  increase  of  50  per 
cent.  The  yield  in  1875  was  292,136,000  bushels,  a  heavy  increase  over  preced- 
ing years.  In  1891  the  yield  was  611,780,000.  Even  last  year,  with  a 
greatly  reduced  acreage  and  a  partial  crop  failure,  the  yield  was  467,100,000 
bushels. 

Q.  Has  the  yield  of  other  crops  increased  correspondingly?    A.  It  has. 

Q.  Give  instances.  A.  The  cultivated  area  of  corn  in  the  United  States  in 
1871  was  34,091,137  acres;  in  1891  it  was  76,204,515;  increase,  124  per  cent. 
The  yield  of  corn  last  year  was  more  than  double  that  of  any  year  prior  to 
1875.  Both  the  acreage  and  the  average  annual  yield  of  oats  have  doubled 
since  1871.  Our  cotton  crop  in  1894  was  50  per  cent,  greater  than  in  any  year 
prior  to  1887. 

8.08 


A  PREB  COINAGE  CATECHISM. 


Q.  Was  a  decline  in  grain  and  cotton  prices,  under  such  conditions,  in- 
evitable? A.  As  inevitable  as  a  decline  in  the  price  of  clothing,  or  furniture, 
or  books,  or  steel  rails,  or  pins,  when  competition  in  their  manufacture  has 
( xtonded  enormously. 

Q.  Would  free  coinage  help  the  producers  of  grain  to  a  larger  profit,  under 
such  conditions?    A.  Not  in  the  least. 

Q.  Why  not?  A.  Because  if  the  nominal  price  of  grain  were  to  rise  through 
inflation  of  the  currency,  the  price  of  everything  else  would  rise  also,  and  the 
farmer  would  be  relatively  no  better  off  than  he  was  before. 

Q.  Do  the  free-coinage  advocates  use  in  their  speeches  these  statistical  facts 
which  we  have  examined?    A.  They  do  not. 

Q.  Can  the  subject  be  understood  without  examining  them?  A.  It  can- 
not; the  whole  question  rests  on  these  facts  regarding  money  and  pro- 
duction.    . 

Q.  Why  do  the  free-coinage  speakers  not  use  these  facts  and  figures?  A. 
Because  the  facts  and  figures  are  against  them. 

Q.  Is  there  any  dispute  over  the  truth  of  the  figures  quoted  in  these  answers? 
A.  They  are  undisputed,  even  by  free-coinage  men.  They  are  taken  from  the 
reports  of  the  United  States  Treasury,  of  the  Department  of  xigriculture,  of  the 
Director  of  the  United  States  Mint,  of  the  United  States  Bureau  of  Statistics, 
and  of  the  British  Board  of  Trade;  each  of  them,  in  its  respective  sphere,  the 
highest  known  authority. 

FREE  COINAGE  AND  WAGES. 

Q.  What  have  we  proved  by  examining  the  statistics  of  money  supply  and 
production?  A.  Three  facts:  (1)  that  the  money  supply  of  this  country  and  of 
the  world  at  large  is  not  contracting,  but  increasing  rapidly;  (2)  that  the  low 
price  of  farm  products  is  caused  by  increased  production,  not  by  contraction 
of  the  currency;  and  (3)  that  the  farmer's  condition  would  not  be  at  all  im- 
proved by  free  coinage  of  silver. 

Q.  Do  not  many  of  our  fellow  citizens,  however,  believe  that  free  coinage 
will  make  them  prosperous?    A.  They  do. 

Q.  Why  not  try  the  experiment,  then,  and  satisfy  these  people?  A.  Be- 
cause the  experiment  would  involve  general  ruin  and  distress. 

Q.  Would  the  rich  suffer  most  from  such  an  experiment?  A.  They  would 
suffer  least  of  all. 

Q.  Who  would  chiefly  suffer?  A.  All  wage-earners,  all  employees  at  fixed 
salaries,  all  depositors  in  savings  banks,  all  holders  of  life  insurance  policies, 
all  veterans  receiving  government  pensions,  and  finally  all  purchasers  of  food, 
clothing,  and  other  necessaries  of  life. 

Q.  Why  would  free  coinage  harm  the  wage-earners?  A  Because  their 
income  would  remain  unchanged,  or  would  change  but  slightly,  while  their 
living  expenses  would  increase  enormously. 

8.04 


A  FREE  COINAGE  CATECHISM. 


Q.  Why  would  their  expenses  increase  under  free  coinage?  A.  Because  of 
the  violent,  general,  and  permanent  rise  of  prices. 

Q.  Would  such  a  rise  in  prices  be  inevitable?  A.  It  would  necessarily 
follow  the  lowering  of  the  money  standard. 

Q.  Would  everything  which  a  wage-earner  buys  advance  in  price?  A. 
Everything;  there  could  be  no  exception. 

Q.  But  would  not  wages  and  salaries  advance  correspondingly?  A.  All  of 
the  world's  experience  in  currency  inflation  proves  that  they  would  not. 

Q.  Has  this  country  had  any  experience  in  the  results  of  such  currency  ex- 
periments?   A.  It  has. 

Q.  When?  A.  Between  1860  and  1865,  when  the  gold  standard  was 
abandoned  and  the  currency  inflated  with  paper  money. 

Q.  Did  prices  in  that  period  rise  faster  than  incomes?  A.  Very  much 
faster. 

Q.  Give  the  figures.  A.  Between  1860  and  1865  the  inflation  of  the  cur- 
rency caused  an  increase,  in  the  average  price  of  all  articles  in  this  country, 
of  116  per  cent. 

Q.  What  was  the  increase  in  wages?    A.  During  the  same  period  wages  in- 
creased on  the  average  43  per  cent. ,  against  the  increase  of  116  per  cent,  in  prices. 
Q.  What  did  this  mean?    A.  It  meant  that  the  cost  of  living  increased 
nearly  three  times  as  fast  as  wages  and  salaries. 

Q.  Where  are  these  figures  obtained?  A.  From  an  expert  investigation 
made  in  1892,  by  order  of  the  United  States  Senate.  This  investigation 
covered  actual  market  prices  of  all  articles  for  a  series  of  years,  and  actual 
wages  in  all  employments.    Its  report  is  standard  authority. 

Q.  Is  the  United  States  Senate's  report  our  only  witness  to  the  high 
prices  of  1865?  A.  Its  figures  are  confirmed  by  the  newspapers  of  the 
period,  which  may  be  consulted  at  any  large  public  library. 

Q.  Give  some  of  tlie  actual  prices.  A.  A  barrel  of  flour  in  1860  cost 
$8.25,  in  1866  it  cost  |16.25.  A  pound  of  butter  cost  17  cents  in  1860,  in  1865 
it  cost  55  cents.  In  1860  a  pound  of  coffee  cost  11^  cents,  in  1864  it  cost 
43  cents.  A  Brussels  carpet  cost  $1,20  per  yard  in  1860,  in  1864  the  cost  per 
yard  was  $3.50.  A  ton  of  coal  cost  $4  in  1860,  in  1865  it  cost  $10.  These 
are  only  wholesale  prices;  retail  prices  rose  even  faster. 

Q.  Give  some  actual  comparisons  of  wages.  A  Day-laborers'  wages  in 
the  mechanical  trades  of  cities  rose,  on  the  average,  only  from  $1  a  day  in 
1860  to  $1  50  in  1865.  Average  compositors'  wages  rose  only  from  $1.66  to 
$2.50.  Locomotive  engineers  in  the  East  averaged  $2.30  a  day  in  1860,  $2.88 
in  1865. 

Q.  What  was  the  result,  with  such  people  as  these,  of  the  abandonment  of 
the  gold  standard?  A.  Inability  to  live  as  they  had  lived  before,  and  in  many 
cases  suffering  and  want. 

8.05 


A  FREE  COINAGE  CATECHISM. 


Q.  What  Other  classes  of  people  suffered?  A.  People  with  small  salaries : 
clerks,  bookkeepers,  teachers,  clergymen,  store  salesmen,  railway  employees. 
Few  of  such  salaries  increased  as  much  as  50  per  cent.,  but  the  cost  of  living 
doubled. 

Q.  Who  else  experienced  hardship?  A.  All  families  living  on  an  insurance 
fund  left  at  the  death  of  a  husband  or  father.  All  people  drawing  interest 
on  savings-bank  deposits.  All  government  pensioners.  The  income  of  these 
people  did  not  increase  at  all,  but  prices  of  what  they  had  to  buy  went  up  116 
per  cent. 

Q.  Would  the  experience  of  all  such  people  be  the  same  under  free  silver 
coinage?    A.  There  could  be  no  other  result. 

Q.  Might  not  wages  and  salaries  rise  faster  now,  under  currency  inflation, 
than  they  did  after  1860?    A.  They  could  not  rise  as  fast. 

Q.  Why?  A.  Because  in  those  years  the  army  enlistment  of  laborers  and 
salaried  employees  had  made  the  home  demand  for  labor  abnormally 
active. 

Q.  What,  then,  do  the  free-coinage  leaders  ask  of  the  wage-earner,  the 
salaried  man,  and  the  savings-bank  depositor?  A.  His  vote  to  increase  the 
cost  of  living. 

Q.  Is  this  a  reasonable  request?  A.  As  reasonable  as  if  they  asked  him  to 
vote  for  lower  wages. 

ARE  LOWER    PRICES  AN  EVIL? 

Q.  Has  the  decline  in  prices  during  this  generation  been  a  misfortune  to 
the  American  people?    A.  It  has  not. 

Q.  Why  not?  A.  Because  people  whose  earnings  are  small  can  now  enjoy 
comforts  such  as  never  before  in  the  history  of  the  world  were  within  their 
reach. 

Q.  But  have  not  wages  fallen  since  1873,  along  with  prices?  A.  They 
have  not;  in  the  great  majority  of  cases  they  are  higher. 

Q.  How  is  it  possible  that  producers  and  manufacturers  should  pay  higher 
wages,  when  prices  of  their  products  have  declined?  A.  Prices  declined 
because  of  great  improvements  and  economies  in  production;  the  laborers' 
share  was  therefore  increased. 

Q.  Is  this  true  with  grain  production?    A.  Even  with  grain. 

Q.  What  has  been  the  cbief  result  of  the  decline  in  the  price  of  grain? 
A.  Plenty  of  food  within  reach  of  everybody. 

Q.  Was  this  true  before  the  recent  enormous-  increase  in  the  world's  grain 
product?    A.  It  was  not. 

Q.  What  was  one  familiar  incident  of  the  earlier  part  of  this  century?  A. 
Famine. 

Q.  Caused  by  what?    A.  Frequent  scarcity  and  high  prices  for  food. 

8.06 


A  FREE  COINAGE  CATECHISM. 


Q.  When  was  the  last  destructive  and  fatal  famine?  A.  In  Russia,  in 
1891. 

Q.  What  followed  that  famine?  A.  Cultivation  of  new  grain  country  all 
over  the  world,  immense  additions  to  the  grain  in  storehouses,  and  a  great 
decline  in  the  price  of  wheat. 

Q.  Is  the  world  likely,  under  these  new  conditions, 'again  to  witness  wide- 
spread famine?    A.  Probably  never  again. 

Q.  Is  not  this  a  gain  to  civilization?  A.  Combined  with  the  cheapened 
cost  of  clothing,  it  is  one  of  the  greatest  blessings  of  modern  history. 

Q.  Do  the  free-coinage  advocates  describe  this  cheapening  of  food  and 
clothing  as  a  blessing?    A.  They  denounce  it  as  a  curse. 

Q.  Where,  for  instance,  is  it  so  denounced?  A.  In  last  June's  address  of 
the  silver  leaders  to  the  American  people. 

Q.  Is  it  the  purpose  of  these  leaders  to  put  an  end  to  these  low  prices?  A. 
Their  words  leave  no  doubt  on  that  point. 

Q.  Can  such  an  attempt  be  successful?  A.  Only  when  the  wage-earners 
of  the  United  States  vote  to  substitute  poverty  for  comfort,  want  for  plenty. 

Q.  Are  the  wage-earners  likely  to  do  this?  A.  Not  if  they  retain  posses- 
sion of  their  senses. 

WHAT  IS  MEANT  BY  16  TO  1  ? 

Q.  What  is  the  meaning  of  free  coinage  at  16  to  1?  A.  It  means  that  six- 
teen ounces  of  silver  shall  have  the  same  debt-paying  power  in  this  country 
as  one  ounce  of  gold. 

Q.  Does  this  mean  silver  produced  in  the  United  States  only?  A.  It 
means  all  the  silver  in  the  world,  in  whatever  form  it  may  exist. 

Q.  What  is  the  present  market  value  of  silver  as  compared  with  gold?  A. 
Sixty -eight  and  three-quarter  cents  per  ounce. 

Q.  What  ratio  between  the  two  metals  does  that  price  correspond  to?  A. 
About  30  to  1. 

Q.  What  would  the  silver  dollar  be  worth  under  free  coinage,  as  compared 
with  the  gold  dollar?    A.  About  53  cents. 

Q.  What  would  be  the  effect  of  free  coinage  at  16  to  1  on  the  prices  of 
commodities?  A.  The  prices  of  all  imported  and  exported  commodities 
would  immediately  rise  in  the  proportion  of  53  to  100.  That  is,  every  such 
article  which  can  now  be  obtained  for  53  cents  would  cost  $1.  Other  articles 
would  rise  eventually  in  the  same  proportion,  but  more  slowly. 

Q.  What  would  be  the  effect  on  wages?  A.  The  first  effect  would  be 
great  confusion,  because  all  business  would  be  disarranged.  Many  employers 
would  fail,  and  many  workmen  would  be  out  of  a  job  in  consequence. 
Since  wages  do  not  rise  spontaneously,  the  workingmen  would  at  first  lose  47 
percent,  of  their  pay;  that  is,  they  would  nominally  receive  their  present 

3.07 


A  FREE  COINAGE  CATECHISM. 


wages,  but  it  would  be  worth  only  53  cents  on  the  dollar  in  the  purchase  of 
commodities. 

Q.  How  could  they  recoup  themselves?  A.  Only  by  successful  strikes  or 
by  voluntary  concessions  of  their  employers. 

WHAT  MONEY  OUGHT  TO  BE. 

Q.  What  is  the  iLdispensable  quality  and  first  requisite  of  money?  A. 
That  it  should  be  universally  acceptable. 

Q.  Is  there  any  kind  of  money  universally  acceptable  but  gold?  A. 
There  is  not. 

Q.  Would  not  silver  be  equally  acceptable  if  it  were  equally  legal  tender? 
A.  Silver  dollars  are  legal  tender.  Give  any  man  the  option  of  taking  one 
hundred  of  these  pieces  or  ten  gold  pieces  of  $10  each  and  he  will  choose  the 
latter.     Therefore  they  are  not  equally  acceptable. 

Q.  Is  the  difference  in  weight  the  only  reason  why  gold  is  more  acceptable 
than  silver?  A.  It  was  the  only  reason  when  civilized  nations  made  their 
choice  between  the  two. 

Q.  What  reasons  exist  now  that  did  not  exist  then?  A.  A  variation  of 
50  per  cent,  has  taken  place  in  the  value  of  the  two  metals.  In  addition  to 
being  sixteen  times  as  heavy,  silver  has  lost  one  half  of  its  value  during  the 
interval. 

Q.  Have  you  mentioned  all  the  reasons  why  gold  is  acceptable  as  money 
and  silver  is  not?  A.  The  most  decisive  reason  is  that  the  civilized  world 
has  adjusted  itself  to  the  gold  standard  during  a  long  period  of  time.  All 
business  is  bottomed  on  it.  It  is  an  accomplished  fact  co-extensive  with  the 
commercial  world.  To  change  to  another  standard  would  be  literally  turning 
the  commercial  world  upside  down. 

Q.  Is  the  preference  for  gold  universal?  A.  It  is  universal  among  civi- 
lized men.  Even  the  silver  advocates  in  the  United  States  prefer  gold  in  their 
business  affairs.  Senator  Stewart  of  Nevada  makes  his  mortgages  payable  in 
gold.  When  he  was  reproved  for  this  bad  example,  he  said  that  he  merely 
followed  the  universal  custom  on  the  Pacific  Coast,  where  he  lives.  So  we 
have  his  authority  for  the  statement  that  in  the  section  of  the  Union  where 
the  demand  for  silver  is  most  vociferous  everybody  prefers  gold  in  his  private 
business. 

Q.  Can  you  give  any  other  examples?  A.  Gov.  Altgeld,  the  chief  of  the 
free- silver  movement  in  Illinois,  is  a  gold  man  in  his  private  business.  He  is 
the  president  and  largest  stockholder  of  the  Unity  Building  Co.  in  Chicago. 
All  the  rents  of  this  building  are  made  payable  "  in  standard  gold  coin  of  the 
United  States."  The  New  York  Herald  published  a  fac-simile  of  one  of  these 
leases  in  its  issue  of  July  15. 

Q.  Can  you  give  any  other  examples?    A.  The  Territory  of  Arizona 

3.08 


A  FREE  COINAGE  CATECHISM. 


brought  a  bill  before  Congress  two  or  three  years  ago,  asking  authority  to 
issue  bonds  payable  specificially  in  gold,  on  the  ground  that  the  money  could 
be  borrowed  at  a  considerably  lower  rate  of  interest  than  if  they  were  payable 
in  dollars  without  specifying  the  kind  of  dollars.  The  State  of  Utah  last  June 
negotiated  a  specific  gold  loan  for  the  same  reason.  Yet  both  Arizona  and  Utah 
are  politically  for  silver. 

Q.  What  do  these  acts  signify?  A.  Two  things:  First,  that  gold  is  prefer- 
able to  silver  in  the  general  estimation  of  mankind;  second,  that  payment  in 
gold  is  an  advantage  to  borrowers. 

GOLD  STANDARD  AND  THE  POOR. 

Q.  "What  do  the  free-coinage  leaders  especially  charge  against  the  gold 
standard?  A.  They  declare  that  it  has  helped  the  rich,  and  has  caused  dis- 
tress and  loss  to  everybody  else, 

Q.  Is  this  statement  true?    A.  It  is  not. 

Q.  Suppose  the  gold  standard  had  worked  injury  to  every  one  except  the 
rich;  how  should  we  know  the  fact?  A.  People  with  small  incomes  would 
have  been  growing  steadily  poorer  since  the  gold  standard  was  adopted. 

Q.  Have  such  people  been  growing  poorer?  A.  On  the  contrary,  their 
prosperity,  since  this  country  returned  to  the  gold  standard  in  1879,  has 
increased  in  an  unprecedented  degree. 

Q.  What  proof  have  you  of  this?  A.  The  increase  in  savings-banks 
deposits. 

Q.  By  whom  are  such  deposits  made?  A.  They  consist  almost  entirely 
of  the  surplus  income  of  tradesmen,  wage-earners,  and  small  producers. 

Q.  What  are  the  figures  of  these  deposits?  A.  In  1879,  the  total  savings- 
bank  deposits  in  the  United  States  were  $802,490,298;  in  1895  they  were 
$1,844,357,798;  increase,  $1,041,867,500,  or  129  per  cent. 

Q.  What  is  your  authority  for  these  figures?  A.  The  official  statements 
of  the  savings  banks  to  the  United  States  government,  published  in  the  reports 
of  the  Comptroller  of  the  Currency. 

Q.  What  do  the  figures  show?  A.  They  show  that  during  the  seventeen 
years  since  this  country's  return  to  the  single  gold  standard  the  savings  of  its 
poorer  people  have  been  a  thousand  million  dollars  larger  than  they  were  in 
any  preceding  period. 

Q.  Are  the  savings-bank  deposits  our  only  proof  that  the  people  have 
prospered  under  the  gold  standard?  A.  The  building  and  loan  associations 
are  another  striking  proof. 

Q,  Who  are  the  depositors  with  building  and  loan  associations?  A. 
Chiefly  wage-earners,  tradesmen,  and  people  with  small  salaries. 

Q.  What  do  the  reports  of  these  associations  show  ?  A.  Twelve  years  ago 
the  deposits  with  such  associations  were  comparatively  insignificant.    In  1892 

8.09 


A  FREE  COINAGE  CATECHISM. 


the  returns  of  the  Uuited  States  Department  of  Labor  showed  the  aggregate 
to  be  $500,000,000.  To-day  the  total  of  these  deposits  in  this  country  is  esti- 
mated at  $750,000,000, 

Q.  How  do  all  these  figures  compare  with  savings-bank  deposits  and  with 
building  and  loan  association  accounts  in  countries  now  on  a  silver  standard? 
A.  Such  countries  have  neither  savings  banks  nor  building  and  loan  associa- 
tions. 

Q.  Why?  A.  Presumably  because  the  wage-earners  in  those  countries 
have  no  savings  to  deposit 

GOLD  STANDARD  AND  LIVING  EXPENSES. 

Q.  How  do  you  explain  so  enormous  an  amount  in  the  savings  of  our 
people?  A.  "Wages  have  increased  since  the  return  to  the  gold  standard. 
Great  improvements  and  extension  of  production  have  lowered  prices  and 
reduced  the  cost  of  living.     This  has  necessarily  increased  the  people's  savings. 

Q.  What  is  your  authority  for  stating  that  wages  have  increased  since  our 
adoption  of  the  gold  standard?  A.  The  highest  known  authority,  the  United 
States  Senate  report  of  1892,  already  referred  to  in  this  Catechism. 

Q.  How  much  does  this  report  show  average  wages  to  have  increased  since 
the  resumption  of  specie  payments?  A.  Up  to  the  latest  date  covered  by  the 
report,  they  had  increased  20%  per  cent.  In  many  industries  the  increase  had 
been  much  larger. 

Q.  Then  the  average  wage-earner's  income  has  increased  under  the  gold 
standard,  while  living  expenses  have  decreased  for  everybody?  A.  Such  are 
the  facts. 

Q.  Would  this  advantage  continue  under  free  silver  coinage?  A.  It 
could  not.  We  have  already  shown  that  wages  would  not  increase  spontane- 
ously if  at  all,  while  prices  for  necessaries  of  life  would  rise  rapidly. 

Q.  Do  the  free  coinage  leaders  admit  this  certain  rise  in  prices?  A.  They 
do;  they  declare  that  all  prices  are  now  too  low,  and  that  free  coinage  will 
raise  them. 

Q.  But  do  not  these  people  claim  that  high  prices  for  food,  clothing  and 
household  necessaries  will  cause  general  contentment  and  prosperity?  A. 
They  do. 

Q.  How  can  we  be  sure  that  they  are  not  right?  A.  Read  up  the  record 
of  years  when  currency  inflation  had  caused  high  prices  in  this  country. 
Look  into  the  condition  of  other  countries  where  prices  now  are  high  under 
a  silver  standard. 

Q.  When  were  prices  and  living  expenses  highest  in  this  country?  A,  lu 
1865  and  1866. 

Q.  What  did  the  American  people  of  that  time  think  of  the  high  prices? 
A.  They  complained  bitterly. 

3.10 


A  FFRT?  COINAGE  CATECHISM. 


Q.  Where  can  we  find  any  record  of  such  complaint?  A.  Go  lo  a  public 
library  and  read  the  newspapers  of  those  years. 

Q.  Give  some  illustrations.  A.  In  1865  the  New  York  papers  seriously 
advised  people  to  stop  eating  meat,  in  order  to  check  the  high  prices.  Let- 
ters from  readers  published  in  these  papers  complained  that  milk,  butter,  coal 
and  ice  were  almost  beyond  the  poor  man's  reach.  One  letter,  in  the  New 
York  Times  of  June  29,  1835,  deserves  to  be  quoted:  "All  last  winter,"  the 
writer  says,  "  T  could  hardly  afford  to  buy  any  meat.  The  little  bits  of  beef 
and  mutton  that  we  poor  people  buy  cost  so  much  that  my  wife  says  it  is  like 
eating  money."    You  can  readily  consult  all  these  published  letters. 

Q.  Would  people  object  to  high  prices  now  as  much  as  they  did  then?  A. 
Every  head  of  a  family  and  housekeeper  is  competent  to  answer  this  question. 

Q.  If  prices  advanced  under  free  coinage,  would  not  the  employer  of 
labor  be  able  to  pay  very  much  higher  wages?  A.  His  own  living  expenses 
would  increase  as  fast  as  Ms  income,  his  business  would  be  thrown  into  con- 
fusion, and  all  his  profits  would  become  a  matter  of  speculation. 

Q.  Was  this  his  experience  when  prices  rose  before  1865?  A.  It  was 
emphatically  his  experience. 

Q.  But  surely,  if  the  money  supply  increased,  the  wage-earner  would  get 
his  share?    A.  He  could  get  no  more  than  his  employer  paid  him. 

Q.  But  might  not  his  employer  advance  wages  simply  because  the  money 
supply  had  increased?  A.  We  leave  the  answer  to  this  question  to  the  wage- 
earner  himself. 

GOLD  STANDARD  AND  THE  PARMER. 

Q,  What  do  the  free-coinage  advocates  commonly  answer  when  they  are 
confronted  with  the  facts  already  stated  in  this  Catechism?  A.  They  reply 
that  whether  the  gold  standard  of  currency  has  helped  the  wage-earner  or 
not,  it  has  seriously  hurt  the  farmer. 

Q.  What  do  they  allege  to  be  the  average  farmer's  condition?  A.  They 
declare  that  as  a  result  of  the  gold  standard  the  farmers  of  this  country  have 
fallen  into  a  desperate  state  of  poverty. 

Q.  Is  this  true?    A.  It  is  not. 

Q.  How  can  you  prove  that  it  is  not  true?  A.  By  the  fact  that  farmers 
have  been  buying  more  farm  land  under  the  gold  standard  of  currency  and 
raising  more  crops.  By  the  fact  that  farmers  in  many  Western  states  are 
paying  off  their  mortgages.  By  the  fact  that  in  the  grain  country,  outside  of 
parts  of  Kansas  and  Nebraska,  farm  lands  are  selling  for  much  more  than 
they  brought  half  a  dozen  years  ago.  Finally,  by  the  personal  testimony  of 
experts. 

Q.  How  do  you  know  that  the  farmers  are  buying  moreland?  A.  By  the 
increase  in  acreage  planted. 

3.11 


A  FREE  COINAGE  CATECHISM. 


Q.  Give  the  figures.  A.  In  1872  the  combined  acreage  of  wheat,  corn, 
oats,  barley  and  buckwheat  in  the  United  States  was  65,428,119;  in  1891  i: 
was  128,428,093;  increase  nearly  100  per  cent.  This  year's  acreage  is  not 
greatly  changed  from  1894. 

Q.  Would  this  increase  have  been  possible  if  farming  had  been  a  losing 
enterprise  ?  A.  Certainly  not.  When  people  find  that  they  are  losing  money 
in  a  business  they  are  apt  to  stop  that  business  altogether.  The  last  thing 
they  do  is  to  extend  the  same  business  to  double  its  former  magnitude. 

Q.  How  do  you  know  that  farmers  are  paying  off  their  mortgages?  A. 
By  the  best  of  authority,  the  statements  of  the  loan  and  mortgage  companies 
which  lent  the  money. 

Q.  Can  you  give  any  instance?  A.  One  company,  the  New  England  Loan 
and  Trust,  lately  published,  in  an  official  statement  to  its  security-holders,  the 
fact  that  $198,944  in  farm  mortgages  were  paid  off  during  last  March  alone. 
Of  this  amount  $92,044  was  paid  before  the  principal  was  due. 

Q.  How  do  you  know  that  farm  lands  have  risen  in  value?  A.  In  Iowa 
particularly  we  base  our  information  on  numerous  deeds  of  sale  m.de  within 
the  last  year  or  two,  showing  advances  of  10  to  20  per  cent.,  within  four  to 
ten  years,  in  the  value  of  land  sold. 

Q.  Have  all  farm  lands  risen  in  value?    A.  N"ot  all. 

Q.  Where  are  the  chief  exceptions?  A.  In  parts  of  Kansas,  where  the 
uncertain  climate  has  made  the  original  purchase  a  bad  investment;  in  parts 
of  Nebraska,  where  the  rainfall  is  uncertain,  and  where  the  opening  of  Okla- 
homa lowered  the  price  of  all  neighboring  farm  country.  These  were  the 
unlucky  experiments,  such  as  are  found  in  every  trade. 

Q.  What  personal  testimony  have  you  as  to  farming  conditions  gen- 
erally? A.  Mr.  Prime,  the  well-known  crop  expert,  and  a  thoroughly 
unbiased  authority,  lately  said  in  a  published  interview  :  *'  The  farmers  in 
the  West  were  never  so  well  off  as  they  are  to  day.  They  never  had  so  much 
to  eat  and  drink,  or  better  clothes  to  wear,  or  owed  so  little." 

Q.  But  is  it  not  true  that  almost  all  the  farmers  are  heavily  in  debt?  A. 
It  is  not.  ' 

Q.  How  do  you  know  they  are  not?  A.  By  the  statistics  of  the  United 
States  census. 

Q.  What  do  these  statistics  show?  A.  By  the  census  of  1890  there  were 
in  the  six  states  of  Iowa,  Kansas,  Nebraska,  Minnesota,  North  Dakota  and 
South  Dakota  720,479  families  cultivating  farms.  Of  this  number  248,750 
families  had  mortgages  on  their  farms,  230,728  owned  their  farms  free,  while 
241,001  rented  their  farms,  and  therefore  had  nothing  to  do  with  mortgages. 

Q.  What  does  this  signify?  A.  It  signifies  that  in  six  representative  far 
Western  grain  states  hardly  one-third  of  the  cultivators  of  farms  have  on 
their  land  any  mortgages  whatever. 

3.12 


A  FREE  COINAGE  CATECHISM. 


Q.  But  are  not  the  farmers  in  the  South  more  heavily  in  debt  than  this? 
A.  The  proportion  of  Southern  farmers  under  a  mortgage  is  wholly  insig- 
nificant. . 

Q.  Give  some  figures.  A.  By  the  1890  census  families  ownmg  farms  free 
in  Kentucky  numbered  118,080;  families  owning  mortgaged  farms  numbered 
4  991  In  Tennessee  farms  owned  outright  were  103,346;  mortgaged  farms, 
3^431.  In  Alabama  the  proportion  was  68,798  to  3,131;  in  Georgia  it  was 
71,116  to  2,491;  in  North  Carolina,  101.321  to  5,202. 

Q.  Would  not  free  silver  coinage  help  the  farmers  to  a  larger  export  trade? 
A.  Not  unless  they  sold  their  grain  abroad  for  a  lower  price  than  they  sell  it 
now,  because  they  must  sell  in  competition  with  all  the  world. 

Q.  But  if  gold  was  at  a  premium  would  it  not  be  a  profit  to  the  farmer  to 
sell  his  grain  abroad  for  gold,  and  then  sell  his  gold  here  for  depreciated  sil- 
ver? A.  Everything  he  wished  to  buy  with  depreciated  silver— clothmg, 
carpets,  furniture,  farm  implements-would  rise  exactly  as  much. 

Q.  Would  hot  the  country's  export  trade  be  helped  by  free  silver  coinage? 
A.  Our  export  trade  has  increased  since  the  demonetization  of  silver  and  since 
our  adoption  of  the  gold  standard  more  rapidly  than  ever  before. 

Q.  How  large  was  this  increase?  A.  Since  1872  the  annual  exports  of  the 
United  States  have  increased  134  per  cent. 

Q.  In  what  products  was  this  export  increase  largest?    A.  In  products  of 

the  farm. 

Q.  Comprising  what?    A.  Grain,  cotton,  tobacco,  meat,  live  cattle,  sheep 

and  hogs. 

Q.  What  was  the  increase  in  these  products?  A.  In  1872  we  exported 
$354,906,637  worth;  in  1878,  $515,955,203;  in  1892,  $754,480,843. 

Q.  What  do  you  conclude  from  all  these  facts?  A.  That  in  spite  of  occa- 
sional set-backs,  occasional  poor  harvests  and  occasional  mistakes  in  farm 
land  investment  the  farmer  in  the  United  States  has  prospered  under  the  gold 
standard,  and  will  prosper  under  its  continuance,  and  that  all  the  "  racket  " 
to  the  contrary  is  made  by  the  few  who  have  failed  and  by  noisy  demagogues. 

PROSPERITY  UNDER  A  GOLD   STANDARD. 

Q  Does  the  gold  now  produced  by  the  world  go  freely  into  money  circu- 
lation?   A.  It  does. 

Q.  How  can  you  prove  that  fact?  A.  By  the  annual  coinage  statements 
of  the  leading  gold-producing  and  gold -importing  nations,  all  of  which  show 
a  steady  increase.  By  the  amount  of  gold  in  the  world's  great  depository 
banks,  which  has  increased  with  equal  rapidity.  These  are  perfectly  trust- 
worthy signs. 

Q.  Is  it  not  true  that  most  of  the  new  supply  is  "cornered"  by  the 
Rothschilds?     A.  There  is  not  the  slightest  reason  for  supposing  such  a  thing. 

8.13 


A  FREE  COINAGE  CATECHISM. 


'  Q.  But  if  the  world's  gold  supply  has  been  increasing  so  rapidly,  and  is  not 
"■  cornered,"  why  has  it  grown  harder  every  year  for  our  government  to  main- 
tain its  own  gold  reserve?  A.  Because  of  the  free  silver  coinage  movement 
in  this  country. 

Q.  How  can  that  movement  affect  our  gold  reserve?  A.  First,  by  forcing 
so  much  new  silver  and  paper  money  into  circulation  that  nobody  pays  gold  any 
longer  to  the  government.  Second,  by  the  threat  that  the  free-coinage  party 
will  redeem  the  government  notes  and  bonds  in  silver  only,  which  causes  hold- 
ers of  the  notes  to  present  them  now  for  gold. 

Q.  "Why  should  such  holders  present  their  government  notes  for  redemp- 
tion now?  A.  For  the  same  reason  that  made  people,  in  the  good  old  state 
bank  days,  rush  in  for  redemption  the  notes  of  a  bank  which  was  likely  to 
stop  payment. 

Q.  Are  there  not  other  nations  than  our  own  whose  currency  requires  a 
large  gold  resrve?    A.  There  are. 

Q.  What  nations,  for  instance?    A.  Germany,  France,  England. 

Q.  Do  not  these  countries  have  the  same  trouble  with  their  gold  reserve 
as  our  Treasury  does?  A.  Not  in  the  least.  The  gold  reserve  in  each  of 
these  three  countries  is  larger  than  necessary,  and  is  constantly  increasing. 

Q.  Why  is  their  situation  so  different  from  ours?  A.  Because  there  has 
been  no  doubt  of  the  money  standard  in  Germany,  France  or  England. 

Q.  But  has  not  the  United  States  always  had  especial  trouble  in  getting 
gold  for  its  currency?    A.  It  has  not. 

Q.  When  did  it  get  gold  easily?  A.  It  was  in  1834,  when  the  gold  stand- 
ard was  adopted,  and  in  1861,  when  paper  money  was  substituted  and  the  gold 
standard  abandoned. 

Q.     Did  gold  flow  in  readily  at  any  other  period?    A.    It  did. 

Q.  When?  A.  After  the  resumption  of  specie  payments  by  the  United 
States  in  1879,  which  was  accepted  by  the  world  as  our  readoption  of  the  gold 
standard. 

Q.  What  followed  that  resumption  of  specie  payments?  A.  Within  two 
years,  $174,000,000  gold  was  sent  to  us  from  Europe. 

Q.  But  surely  this  gold  did  not  go  into  the  Treasury?  A.  More  of  it 
than  the  Treasury  needed  went  in. 

Q.  How  do  you  know  that?  A.  As  early  as  September  19, 1879  the  Sec- 
retary of  the  Treasury  announced  that  "gold  coin,  beyond  the  needs  of  the 
government,  had  accumulated  in  the  Treasury,"  and  authorized  the  use  ©f 
gold  in  regular  Treasury  expenditures. 

Q.  Were  those  two  years  a  period  of  prosperity?  A.  For  this  country,  a 
period  of  unparalleled  prosperity. 

Q.  How  long  did  this  prosperity  last?  A.  Until  the  silver-coinage  move- 
ment was  again  threatening  our  maintenance  of  the  gold  standard. 

8.14 


A  FREE  COINAGE  CATECHISM. 


Q.  What  happened  then?  A.  Gold  payments  into  the  Treasury  ahnost 
ceased,  and  gold  withdrawals  through  redemption  of  government  notes  grew 
larger. 

Q.  Suppose  all  the  gold  in  the  Treasury  reserve  were  to  be  used  up;  what 
would  happen?  A.  The  government  could  not  pay  gold  coin  to  the  holders 
of  its  notes. 

Q.  What  difference  would  that  make  to  a  holder  of  a  government  note — 
say  of  a  dollar  bill— who  did  not  care  to  use  gold?  A.  His  dollar  bill  would 
depreciate  along  with  all  other  government  notes.  Since  it  no  longer  could 
exchange  for  a  dollar  in  gold,  it  would  no  longer  buy  what  a  dollar  in  gold 
would  buy. 

Q.  How  would  such  depreciation  show  itself  ?  A.  By  an  artificial  and 
general  rise  in  prices,  without  a  rise  in  wages  and  salaries. 

Q.  Has  this  ever  actually  happened?  A.  During  our  civil  war,  when  the 
gold  standard  was  abandoned,  the  government  paper  money  depreciated  to  50 
per  cent,  of  its  gold  value,  the  gold  premium  rose  above  100,  and  there  was  a 
frightful  advance  in  prices. 

B.  Then  would  suspension  of  gold  payment  on  government  notes  injure 
all  holders  of  such  notes?  A.  Sooner  or  later,  it  would  cheat  every  man 
with  a  dollar  bill  in  his  pocket. 


3.15 


PRINCIPLES    OF  MONEY   AND    BANKING. 


PRINCIPLES    OF    MONEY    AND    BANKING.* 

The  Nature  and  Use  of  Money. 

Everybody  wants  to  "  make  money,"  and  few  think  they  need  any  instruc- 
tion as  to  its  "use."  But  in  this  sense  the  word  money  is  used  in  a  loose  way 
instead  of  the  word  wealth,  and  a  great  deal  of  harm  has  come  from  this  con- 
fusion of  terms.  From  it,  indeed,  came  the  notion  that  a  country  grows 
wealthy  in  proportion  as  money  is  kept  from  going  out  of  it,  and  the  belief  that 
government  can  make  wealth  by  coining  money  or  issuing  paper  as  a  substitute 
for  money.  Money  is  simply  that  kind  of  wealth  commonly  current  in  exchange, 
and  whose  terms  are  used  for  valuations.  It  is  peculiarly  useful  as  a  medium 
of  exchange  and  as  a  measure  of  value,  but  otherwise  and  for  itself  it  may  be 
one  of  the  least  desirable  forms  of  wealth. 

Just  as  a  boy  contrives  "pin-money  "  to  help  out  his  "swaps,"  so  the  early 
nations  contrived  money  to  get  rid  of  inconveniences  in  direct  barter.  The 
shoemaker  does  not  often  want  a  hat  just  when  the  hatter  wants  a  pair  of  shoes, 
nor  can  the  hatter  conveniently  take  one  shoe  for  bis  hat  or  the  shoemaker 
take  two  hats  for  his  pair  of  shoes.  Money,  as  a  common  medium  of  exchange, 
enables  us  to  do  away  with  the  "double  coincidence  of  wants  and  possessions," 
for  which  barter  waits.  We  accomplish  half  our  exchange — that  is,  the  shoe- 
maker sells  his  shoes,  and  holds  the  purchasing  power  in  suspense — that  is,  the 
shoemaker  keeps  the  money  till  he  wants  a  hat  or  something  else.  Or,  if  the 
shoemaker  sells  on  credit,  he  uses  the  terms  of  money  to  record  the  indebted- 
ness of  the  buyer  in  his  books.  The  use  of  money,  instead  of  barter,  is  one  of 
the  great  steps  of  progress ;  the  seller  can  now  buy  when,  where,  and  as  he 
desires. 

The  first  use  of  money,  then,  is  as  the  common  medium  of  exchange ;  any 
one  will  take  it  anywhere  for  any  goods,  and  it  enables  one  to  buy  as  much  or 
as  little  as  he  wants.  It  is  the  highway  of  exchange,  enabling  any  producer  to 
deal  with  any  consumer,  and  so  fulfilling  the  first  condition  of  wealth,  of  get- 
ling  most  for  least  labor.  Second,  money  becomes  in  this  way  a  common 
measure  of  value,  or  common  "  value-denominator  "  by  which  the  values  of  all 
other  things  are  compared,  A  price-current  in  money  is  understood  by  all, 
and  a  hundred  articles  are  priced  in  a  hundred  items,  instead  of  in  the  4950  it 
would  take  if  we  priced  each  article  in  terms  of  every  t  ther.  This  furnishes  a 
universal  language  of  trade.  Third,  money  is  a  standard  of  values,  or  measure 
for  deferred  payments.      This  is  the  use  in  "credit,"  which  is  purchase  in  which 

*  Chapters  reprinted  from  Bowker's  "  Economics  for  the  People,"  (copyright,  1886,  1892, 
by  R.  R.  Bowker),  revised  by  the  author  to  date,  by  permission  of  Messre.  Harper  &  Brochers. 

8.16 


PRINCIPLES    OF   MONEY   AND   BANKING. 


payment  is  put  off.  The  word  comes  from  the  Latin  word  credo,  "•  I  believe," 
for  it  is  given  in  the  belief  that  the  debtor  will  pay.  A  promise  to  pay  at  a 
future  time  is  expressed  in  terms  of  money  in  preference  to  other  commodities, 
because  people  understand  this  term  and  because  they  look  upon  money  as  of 
staple  value.  Fourth,  money  becomes  thus  a  convenient  simmer  of  values,  so 
that  men  can  buy  when  they  desire,  now  or  in  the  future,  to  best  advantage, 
There  are  here  two  distinct  kinds  of  use  — one  direct,  as  the  common  medium 
in  actual  use  in  exchange  ;  the  other  indirect,  as  a  common  measure,  standard, 
and  storer  of  values,  in  which  not  money  itself  but  its  terms  are  used. 

These  two  kinds  of  use — the  use  of  the  thing  and  the  use  of  the  name,  or 
the  direct  use  and  the  representative  use  of  money — must  be  kept  very  clearly 
in  mind.  A  farmer  who  says  to  his  boy,  "Go  to  the  wheat-bin  and  get  me  a 
bushel,"  may  mean  a  bushel  of  wheat  or  a  bushel-measure  :  it  is  important  for 
the  boy  to  find  out  which.  The  word  money  or  the  word  dollar  admits  of  this 
same  double  sense.  There  is  the  same  difference  between  a  dollar  which  repre- 
sents cost  of  production,  or  labor-value,  and  a  dollar  which  is  simply  a  name 
printed  on  a  piece  of  paper,  that  there  is  between  a  "  bushel"  of  wheat  and  a 
"bushel"  measure.  The  one  is  good  in  itself;  the  other  is  useless  except  so 
far  as  it  is  generally  accepted  to  measure  real  products. 

Different  nations  have  used  different  kinds  of  wealth  as  the  common  medium 
of  exchange,  which  was  the  use  for  which  money  came  into  being.  Our  word 
"  capital"  comes  from  the  Latin  caput,  a  head,  as  does  the  word  "  cattle,"  and 
like  "pecuniary,"  coming  from  the  Latin  pecnnioj,  wealth,  pecus,-  a  herd,  pecu, 
cattle,  points  to  the  early  use  of  cattle  and  sheep  as  money  by  the  Greeks, 
Romans  and  Germans.  But  these,  though  they  could  be  driven  about,  could 
not  be  easily  carried  or  divided  ;  and  wheat  was  also  used  by  the  old  nations 
as  soon  as  they  became  farmers  as  well  as  herdsmen,  doubtless  partly  as  "small 
change."  Most  of  the  barbarous  nations  selected  that  kind  of  wealth  raost 
current  (whence  our  word  currency),  most  easy  to  carry  and  most  easy  to 
handle  in  small  as  well  as  large  quantities.  Dates  were  used  by  some  African 
tribes,  rock  salt  by  the  Abyssinians,  olive  oil  by  the  Ionian  islanders,  tea  com- 
pressed in  small  cakes  by  the  Russians,  tobacco  by  the  early  American  planters. 
The  fees  of  the  Clerk  of  the  Supreme  Court  of  the  United  States,  in  cases  where 
the  Government  is  a  party,  were  long  reckoned,  following  old  Maryland  customs, 
in  pounds  of  tobacco,  and  settled  according  to  an  old  legal  valuation  of  tobacco. 
All  these  kinds  of  money  recognize  that  the  sound  basis  for  money- value  is 
wealth — something  which  has  cost  proportionate  labor. 

In  the  progress  of  civilization  it  was  found  that  the  metals  were  the  most 
convenient  kind  of  wealth  to  use  as  money.  Iron  was  used  by  the  Spartans, 
lead  by  the  early  Romans  and  early  English,  tin  by  Swedes,  Mexicans  and 
other  people,  copper  or  bronze  by  almost  all  nations.  All  of  these,  of  course, 
cost  a  certain  amount  of  labor  to  mine  them.     At  last  it  became  settled  that 


3.17 


PRINCIPLES    OF   MONEY   AND   BANKING. 


the  two  "precious  metals,"  gold'  and  silver,  were  most  convenient  of  all.  A 
third,  platinum,  was  used  for  a  little  time  in  Russia.  The  two  precious  metals 
meet  every  condition  for  good  money :  they  cost  such  an  amount  of  labor  as  to 
make  them  convenient  to  handle  within  the  common  range  of  buying  and  sell- 
ing; they  have  utility  as  ornaments  and  in  many  industrial  arts;  they  are  thus 
easily  transferable  and  universally  acceptable ;  they  are  almost  imperishable, 
not  wasting  greatly  either  by  handling,  or  rust,  or  conversion  into  coin  and 
back  again,  and  their  fusibility  and  ductility  render  them  accurately  divisible. 
These,  with  copper  or  an  equivalent  as  "  small  change"  or  token  currency,  are 
the  money  of  the  trading  world;  and  as  gold  possesses  most  of  the  qualities 
named  in  even  greater  degree  than  silver,  there  is  evident  a  tendency  toward 
the  use  of  that  metal  as  the  one  final  standard  among  the  most  civilized  nj\tions. 
The  nature  of  "paper-money,"  so  called,  or  substitute-money,  we  have  yet  to 
consider. 

Gold  and  Silver  as  Standard  Money. 

"  And  Abraham  weigh-ed  to  Ephron  the  silver  .  .  .  four  hundred  shekels 
of  silver,  current  money  with  the  merchant "  (Genesis  xxiii,  16).  This  first 
record  of  a  business  transaction -shows  clearly  the  origin  of  metal  money — it 
was  so  much  weight  of  metal.  *'  Shekel  "  meant  a  "  weight "  (about  half  an 
ounce  Troy),  just  as  the  English  "  pound"  was  at  first  a  pound  weight  of  silver. 
The  shekel,  later  on  (Exodus  xxxviii.  24),  was  measured  "after  the  shekel  of 
the  sanctuary,"  probably  a  standard  of  weight  kept  in  tho  temple,  like  the 
standard  weights  now  kept  by  each  nation,  by  which  its  coinage  is  regulated. 
But  the  "shekel  of  gold  "  came  to  mean  less  weight  than  the  "  shekel  of  sil- 
ver," so  that  a  standard  was  kept  for  each — probably  a  result  of  just  such 
changes  in  the  value  of  the  two  kinds  of  money  as  we  see  in  later  times. 

Gold  and  silver  have  been  found  in  almost  all  countries,  and  they  were 
early  used  as  money.  Men  soon  found  that  it  was  easier  to  count  than  to 
weigh  with  scales.  This  led  to  coinage,  the  making  of  pieces  of  metal  of  fixed 
weight  and  fineness,  whose  value  is  shown  by  the  stamp.  The  rude  Abyssinians 
make  their  rock-salt  into  bars  a  foot  long  and  three  inches  square,  which  serve 
the  same  purpose.  In  the  early  days,  when  all  trading  was  a  matter  of  honor, 
sealed  bags  of  gold-dust  passed  at  a  fixed  value.  When  public  opinion  made  a 
dishonored  man  a  social  outcast,  there  was  little  cheating.  Rings  and  the 
Chinese  "cash"  (dating  to  2500  B.  C.)  were  early  forms  of  metal-money.  Our 
modem  coin,  the  round,  flat  piece,  stamped  on  both  sides,  is  traced  back  to  the 
Greek  Pheidon,  king  in  Argos,  about  750  B.  C.  The  old  coins  were  of  irregular 
edge,  which  could  be  easily  clipped  or  filed;  the  edge  is  now  "  milled  "  by  a 
machine  invented  in  1685,  so  that  modern  coins  are  protected  against  all  loss 
but  wear.  To  make  this  as  little  as  possible,  an  "  alloy  "  of  harder  metal  is 
mixed  with  gold  or  silver — in  the  United  States  coins  one -tenth  copper  alloy 

048 


PRINCIPLES    OF   MONEY   AND   BANKING. 


to  nine-tenths  fine  metal,  in  the  English  coins  one-twelfth — but  only  the  pre- 
cious metal  is  reckoned  in  valuing  the  coin.  In  old  times  a  coigne,  or  wedge, 
like  the  printer's  quoin,  was  used  in  stamping,  whence  our  word  "  coin,"  The 
Roman  coins  were  made  in  the  Temple  of  Juno  Moneta,  whence  our  word 
mint,  the  factory  where  money  is  coined,  as  well  as  the  word  money  itself. 

Gold  and  silver  are  used  as  money  partly  because  they  last  longer,  so  that 
each  year's  product  adds  but  a  small  proportion  to  the  existing  stock,  and  vary 
less  in  value  than  almost  any  other  things.  Nevertheless,  they  have  varied  in 
value,  according  to  supply  and  demand  ;  at  one  period  both  together,  when  all 
prices,  or  values  of  other  things  in  m.oney,  rose  as  they  fell,  in  recent  times 
silver  falling  greatly  relatively  to  gold.  Silver  had  been  of  equal  value  with 
gold  in  some  barbarous  countries.  In  Japan,  when  it  was  opened  to  foreigners, 
it  took  but  four  times  the  weight  in  silver  to  equal  in  value  the  same 
weight  in  gold;  among  the  Greeks,  before  Xenophon,  it  took  13J^;  later,  and 
among  the  Romans,  1 2  times,  though  it  is  said  only  9  to  7|-  times  the  weight  of 
silver  equaled  gold  after  the  return  of  Julius  Csesar.  During  the  Christian 
era  the  rate  has  varied  in  different  times  and  in  different  countries  at  the  same 
time,  being  in  the  early  centuries  about  12 1 ;  later  on  as  high  for  silver  as  9| 
in  England  (1262),  and  lO^V  m  Spain  (1500)  ;  in  1641,  about  12  in  Germany,  13^ 
in  England,  IS^  in  France;  in  1724,  14|-  in  France,  15i  in  England;  in  the 
present  French  coinage  15J  and  in  the  English  144^,  while  the  market  rate 
for  silver  bullion  has  of  recent  years  ruled  much  below  15^,  and  has  been  as 
low  as  32  weights  of  silver  for  the  same  weight  in  gold. 

It  is  agreed  on  all  sides  that  steady  money  is  most  important  for  sound 
business.  "  Mono-metallists  "  assert  that  only  one  kind  of  metal  can  properly 
be  used  as  a  standard,  by  preference  gold,  because  silver  must  always 
have  "ups  and  downs"  in  relation  to  gold,  and  first  one  and  then  the 
other  would  be  used  in  business  according  to  which  was  cheapest,  if  both  were 
*'  standards."  ''  Bi-metallists  "  assert  that  the  world  needs  both  gold  and  silver 
for  standard  money,  and  say  that  if  civilized  countries  would  unite  in  coining 
silver  at  a  fixed  rate  of  15^  or  16  to  1  gold,  there  would  be  no  serious  derange- 
ment. Most  economists  favor  the  single  gold  standard.  The  qn  estion  has  been 
made  a  political  one,  and  two  international  conferences  have  been  held, 
without  reaching  results.  Great  Britain  and  its  Australian  and  American 
colonies,  Germany,  Scandinavia  and  Chili  are  the  chief  gold-standard  countries, 
using  silver  as  "  legal  tender  "  only  for  small  sums  ;  Russia,  India,  China  and 
Japan,  Mexico  and  Central  ximerica  use  a  single  standard  of  silver.  The  double 
standard  is  maintained  by  France,  Ital}--,  Belgiam,  Switzerland  and  Greece,  which 
are  bound  into  the  '*  Latin  Union,"  by  Spain,  and  by  the  United  States.  Silver, 
which  up  to  the  fourteenth  century  was  chiefly  used  for  coinage,  seems  to  re- 
main the  money  of  the  less  civilized  countries ;  the  general  tendency  seems  to 
be  in  favor  of  a  single  standard,  and  that  gold. 

3.19 


PRINCIPLES   OF   MONEY   AND   BANKING. 


But  the  two  metals,  used  as  money,  have  also  had  their  "ups  and  downs  " 
together.  There  was  in  circulation  in  the  Roman  empire  in  the  time  of  Christ 
(so  Mr.  Jacobs  estimates)  about  $1,790,000,000  gold  and  silver.  With  the  de- 
cline of  the  empire  and  the  invasion  of  the  Goths  mining  practically  stopped,  and 
the  loss  and  wear  of  coined  money  reduced  the  stock  in  Europe  by  the  year  800  to 
less  than  $  168,000,000,  a  point  at  which  it  was  kept,  by  the  revival  of  mining, until 
the  discovery  of  America  in  1492.  Meanwhile  money  had  greatly  risen  in 
value;  it  required  only  £3  lOs,  weekly  ($17.50)  for  the  subsistence  of 
King  Henry  VI.  and  ten  retainers  while  prisoners  (1470)  of  Edward  IV.  The 
discovery  of  America  began  a  new  chapter  in  the  history  of  money;  after 
the  opening  of  the  great  silver  mines  of  Potosi  in  1545,  and  the  invention  by  a 
Mexican  miner  of  the  process  of  amalgamating  silver  with  mercury,  over 
$10,<  00.000  yearly  was  sent  to  Europe.  Money  fell  rapidly;  the  price  of  corn 
rose  in  England  from  2s.  to  6s.  and  8s.  per  quarter  ;  prices  generally  rose  four- 
fold; debts  were  made  almost  nothing;  and  to  the  ensuing  derangement  and 
distress  cistorians  trace  the  beginning  of  English  pauperism,  and  those  money 
troubles  of  Charles  I.  which  led  to  the  great  rebellion. 

About  1809  Europe  had  $1,900,000,000  metal  money  in  circulation,  but  the 
Spanish-American  revolutions  reduced  the  silver  supply,  and  the  product  of  the 
Ural  gold-mines,  opened  in  1823,  did  not  make  good  the  loss,  so  that  in  1829 
the  stock  was  down  to  $1,566,000,000.  The  discoveries  of  gold  in  California 
(1848)  an«A  Australia  (1851)  again  changed  the  face  of  things.  The  annual  yield 
of  gold  and  silver,  over  two-thirds  gold,  while  before  it  had  been  two- thirds 
silver,  rose  to  $190,000,000  and  over  ;  and  economists,  who  had  feared  a  disas- 
trous rise  in  prices,  now  began  to  fear  as  disastrous  a  fall.  It  is  estimated  that 
the  commercial  countries  had  in  1895  about  $8,000,000,000  coin  and  bullion, 
about  half  gold,  of  which  the  United  States  has  $018,000,000  gold  and  $625,- 
000,000  silver;  France,  $850,000,000  gold  and  $487,000,000  silver;  Great  Britain 
$580,000^000  gold  and  $115,000,000  silver;  and  Germany,  $625,000,000  gold 
and  $215,000,000  silver.  The  opening  of  the  Nevada  and  Colorado  mines  has 
increased  the  relative  production  of  silver;  out  of  the  world's  product  (3895)  of 
$203,000,000  gold  and  $226,000,000  silver  (U.  S.  coinage  value),  the  United 
States  supplied  $46,000,000  gold  and  $72,000,000  silver,  or  one-third.  Silver  in 
the  London  market  has  fallen  as  low  as  32  to  1.  But  the  great  increase  in 
money  seems  to  have  been  offset  by  the  increased  productive  activity  brought 
about  by  machinery  and  by  other  causes. 

Variations  in  prices  from  period  to  period  have  led  economists,  and  par- 
ticularly Professor  Jevons,  to  urge  the  use  of  a  "  tabular  or  multiple 
standard  of  value "  to  reckon  payments  which  are  to  be  made 
many  years  off.  Some  of  the  long  English  leases  of  land,  fixed 
centuries  ago  in  money,  are  now  ridiculously  small.  On  the  other  hand,  the 
colleges  of  Oxford,  Cambridge  and  Eton,  receiving   "  corn  rents,"  according  to 

8.20 


PRINCIPLES   OF   MONEY   AND   BANKING. 


a  law  of  Queen  Elizabeth's  time,  are  much  better  off,  but  the  value  of  the 
rentals  varies  greatly  from  year  to  year.  The  "  multiple  standard,"  it  is 
claimed,  would  avoid  both  these  difiiculties  ;  the  price  of  given  quantities  of  a 
number  of  articles  of  common  use,  such  as  corn,  potatoes,  beef,  wool,  coal, 
etc.,  would  be  added  together  each  year,  and  the  total  declared  in  terms  of 
money  by  the  Government.  If  it  took  $80  or  $120  to  buy  what  cost  $100  at 
the  first,  then  the  payment  would  be  $80  or  $120  in  money  instead  of  $100, 
but  it  would  buy  exactly  the  same  amount  of  goods.  This  is  really  deferred 
barter,  so  that  the  same  equivalent  in  things  may  be  paid  back,  without 
reference  to  the  prices  of  the  things  or  their  value  in  money. 

United  States  Money. 

During  our  war,  when  metal-money,  and  particularly  "  change,"  was  very 
scarce — so  that  we  used  postage-stamps  and  afterward  "  postal  currency," 
representing  five  or  ten  or  twenty-five  or  fifty  cents'  worth  of  postage-stamps — 
a  good  many  shopkeepers  issued  copper  tokens  "good  for  one  cent,"  which 
passed  current  as  money.  Many  of  them  were  not  good  for  a  cent,  and  were 
never  redeemed  by  the  issuers.  Probably  in  the  early  days  of  coinage,  private 
people  thus  made  coins.  But  now  only  nations  do  so,  for  *'  the  public  faith  " 
is  the  best  surety  that  coins  contain  so  much  metal  of  such  a  fineness,  or  will 
be  good  for  the  money's  worth,  and  coinage  is,  as  Jefferson  said,  "  peculiarly 
an  attribute  of  sovereignty."  Counterfeiting  was  once  punished  in  England  as 
treason,  by  death ;  it  is  punishable  in  this  country,  in  the  case  of  United  States 
notes,  by  fifteen  years'  imprisonment.  It  is  recognized  as  one  of  the  most 
serious  crimes  against  property,  because  it  undermines  the  very  foundations  of 
sound  business,  honesty  in  weights  and  measures.  Even  were  good  metal 
used,  coining  by  individuals  is  by  law  a  misdemeanor. 

The  Constitution  gives  to  Congress  the  power  "to  coin  money,  regulate  the 
value  thereof  and  of  foreign  coin,  and  fix  the  standard  of  weights  and  meas- 
ures," and  denies  to  the  States  power  to  "coin  money  ;  emit  bills  of  credit  ; 
make  anything  but  gold  and  silver  coin  a  tender  in  payment  of  debts."  A 
clause  giving  Congress  the  power  to  "emit  bills  on  the  credit  of  the  United 
States  "  was  struck  out  in  the  debates,  to  avoid,  as  was  said  in  the  debates, 
even  a  "  pretext  for  a  paper  currency,  and  particularly  for  making  the  bills  a 
tender  either  for  public  or  private  debts."  The  Continental  Congress  in  1785 
unanimously  adopted  as  the  money  unit  the  "  dollar,"  the  name  coming 
th/jugh  the  Spanish  "dollar"  from  the  German  "thaler,"  or  "Joachims- 
tLaler ,' '  the  Joachim  thai  or  dale  being  the  seat  of  great  sil  ver-mines  where 
ouuce-pieces  were  coined.  The  law  establishing  the  mint,  1792,  provided  for  a 
silver  dollar  unit  of  416  grains,  871^  grains  of  it  fine  metal,  and  a  gold  "eagle" 
or  ten-dollar  piece  of  270  grains,  247^  grains  fine  ("the  proportionate  value  of 
gold  and  silver"  being  defined  *'as  15  to  1,  according  to  quantity  in  weight"), 

3.21 


PRINCIPLES    OP   MONEY   AND   BANKING. 


besides  other  gold,  silver,  and  copper  coins.  In  1834  and  1837,  changes  were 
made,  the  later  law  providing  for  coin  9-10  fine,  the  silver  dollar  weighing  412| 
grains  and  the  gold  eagle  258  grains.  The  present  coins  are :  of  gold,  the 
double-eagle  ($20),  eagle  ($10),  half-eagle  (|5),  and  quarter-eagle  ($2^),  the 
gold  dollar  (not  coined  since  1890)  being  the  money  unit  with  a  standard  weight 
of  25.8  grains;  of  silver,  the  dollar,  half-dollar,  quarter-dollar,  and  dime;  of 
base  metal,  the  five  and  one  cent  pieces.  The  law  of  1853  provided  that  half 
dollars  and  other  subsidiary  silver  coins  should  contain  but  384  grains  gross 
weight  to  the  dollar,  and  made  a  seignorage  charge  of  ^  of  one  per  cent, 
—afterwards  reduced.  From  1873  to  1878  the  silver  "trade-dollar"  of 
420  grains  (378  fine  metal)  was  struck,  chiefly  for  foreign  trading.  It 
was  a  legal-tender,  by  -an  oversight  in  the  law,  up  to  five  dollars,  till  1876, 
when  its  legal-tender  character  was  repealed.  In  1883  Government  declined 
to  receive  it  at  full  value,  people  began  to  realize  that  it  did  not  contain  a 
dollar's  worth  of  silver,  and  it  fell  to  about  85  cents.  In  1873,  the  gold  dollar, 
of  25.8  grains  gross  weight  was  made  "  the  unit  of  value."  In  1878  Congress 
passed  over  the  veto  of  President  Hayes  the  Bland-Allison  Act,  providing  for  a 
"  standard  silver  dollar  "  of  412.^  grains  as  an  unlimited  "legal  tender,"  and 
the  coinage  of  $2,000,000  to  $4,000,000  of  these  per  month,  and  in  1887  these 
were  made  exchangeable  for  the  "trade  dollar."  The  "Sherman  Act"  of 
1890  provided  for  the  purchase  at  market  price  of  4,500,000  ounces  of  silver 
each  month,  of  which  2,000,000  ounces,  or  enough  to  provide  for  the  redemp- 
tion of  "silver  certificates,"  should  be  coined  monthly,  the  profit  or  seigniorage 
going  into  the  Treasury.  This  act  was  repealed  in  1893,  to  stem  the  panic  of 
that  year. 

The  Government  declares  what  money  shall  be  "legal-tender"  among  its 
citizens,  that  is,  what  kind  of  money  when  tendered  by  a  debtor  shall  make  a 
legal  offer  to  discharge  a  debt.  If  you  offer  to  pay  rent  in  any  other  kind  of 
money  than  legal-tender  the  landlord  can  refuse  to  accept  it,  and  can  get  a  court 
to  put  you  out  as  though  you  had  refused  to  pay.  The  gold  coins  of  the  United 
States  and  the  "standard  silver  dollar"  are  legal -tender  for  all  sums;  the 
small  silver  for  sums  not  exceeding  ten  dollars;  and  the  nickels  or  the  old 
copper  cents  for  sums  not  exceeding  twenty-five  cents  in  any  one  payment. 
The  small  silver  and  nickels  issued  for  "  change,"  make  no  pretense  to  full 
value,  and  are  a  "  token  money,"  to  be  redeemed  by  the  Government.  They 
are  purposely  under-weighted,  so  that  they  shall  not  be  melted  down  or  carried 
out  of  the  country. 

The  word  legal-tender  is  commonly  used  to  signify  the  "United  States 
notes"  or  "greenbacks,"  issued  under  the  Acts  of  February  25,  1862,  and 
March  3,  1863,  which  say  on  the  back  :  "  This  note  is  a  legal-tender  at  its  face 
value  for  all  debts,  public  and  private,  except  duties  on  imports  and  interest 
on  the  public  debt,"  both  of  which   are  payable  in  metal-money.      The  law 

3.22 


I 


PRINCIPLES    OF   MONEY   AND    BANKING. 


signed  by  President  Lincoln  February  25,  1862,  was  the  first  making  anything 
but  gold  and  silver  coin  a  legal  discharge  of  debts,  although  the  Continental 
Congress,  January  4,  1777,  passed  a  resolution  asking  the  States  to  declare  its 
bills-of-credit  legal-tender,  which  was  done  by  eight  States.  The  Law  of  1862 
was  passed  as  a  "war  measure,"  and  included  "all  debts  within  the  United 
States."  In  December,  1869,  the  United  States  Supreme  Court  declared  that 
the  legal-tender  clause  was  "  unnecessary  and  improper,"  that  its  application 
to  pre-existing  debts  impaired  the  obligation  of  contracts,  and  that  the  law 
was  therefore  unconstitutional.  In  1870  two  vacancies  on  the  bench  were 
filled  by  President  Grant ;  on  a  new  case  a  rehearing  was  had,  and  in  January, 
1872,  the  decision  was  overruled,  and  it  was  held  that  "  Congress  has  power 
to  enact  that  the  Government's  promises  to  pay  money  shall  be,  for  the  time 
being,  equivalent  in  value  to  the  representation  of  value  determined  by  the 
coinage  acts,"  "  There  are  times,"  added  Justice  Bradley,  "when  the  exi- 
gencies of  the  State  rightly  absorb  all  subordinate  considerations."  This 
decision  justified  the  issue  of  legal-tenders  as  a  war  measure ;  but  a  third 
decision,  in  March,  1884,  went  further,  and  declared,  only  one  judge  dissent- 
ing, that  Congress  has  power  at  any  time  to  authorize  the  issue  of  legal-tender 
notes,  on  the  ground  that  this  is  an  attribute  of  sovereignty  not  reserved  or 
denied  by  the  Constitution.  The  decision  is  regarded  by  most  economists  as 
dangerous,  and  it  is  believed  that  even  the  war  could  have  been  carried  on 
at  less  final  cost  if  other  financial  measures  had  been  used. 

Of  course,  in  making  metal-money  it  costs  something  to  tfest  the  metal  and 
stamp  it  into  coins.  This  cost  may  be  paid  for  as  a  general  expense  of  the 
Government  out  of  taxes,  and  the  full  weight,  or  face  value,  of  metal  put  into 
the  coin.  This  is  '' gratuitous  coinage,"  and  is  the  English  practice.  Some 
economists  object  that  it  leads  jewelers  to  melt  up  new  coins  instead  of  assay- 
ing for  themselves,  and  makes  the  Government  pay  for  a  * '  perpetual  motion  " 
of  coinage.  Or,  this  cost  may  be  paid  by  deducting  enough  metal  before  making 
the  coin.  This  deduction  is  "  seigniorage,'*  the  pay  of  the  seignior  or  sovereign. 
Up  to  1853  the  United  States  had  gratuitous  coinage,  but  in  that  year  a 
seigniorage  of  one- half  of  one  per  cent,  was  established  for  gold  coins  and 
silver  dollars,  reduced  in  1873  to  one-fifth.  Since  1875,  gold  coinage  has  been 
gratuitous.  Both  England  and  the  United  States  now  have  "  free  coinage  "  for 
gold,  that  is,  any  citizen  can  have  gold  bullion  (uncoined  metal)  made  into  coin 
by  the  mint  on  the  same  terms  as  the  Government.  The  coinage  of  standard 
silver  dollars  is  now  determined  in  the  United  States  by  the  redemption  of 
"  silver  certificates,"  and  is  practically  discontinued  because  of  the  great 
number  in  the  Treasury  vaults.  The  amount  of  "•  change  "  coined  depends 
upon  the  public  need,  as  determined  here  by  the  Treasury,  in  England  by  the 
Bank  of  England. 

The  trouble  with  seigniorage  is,  that  it  makes  it  easier  for  a  government  to 

3.23 


PRINCIPLES    OF   MONEY   AND   BANKING. 


debase  its  own  coins,  either  by  putting  in  less  metal  or  by  mixing  in  a  cheaper 
metal.  Up  to  1300  (Edward  I.)  a  "  pound  "  really  meant  a  pound's  weight  of 
silver,  and  a  shilling  a  twentieth  of  that.  But  the  coinage  was  again  and  again 
reduced  in  weight,  so  that  for  generations,  it  is  now  supposed,  the  English 
people  actually  weighed  out  their  coins  in  settliDg  payments.  The  steadiness 
of  prices  in  face  of  a  known  debasement  of  coinage  cannot  otherwise  be 
explained.  Sixty-six  shillings  now  make  up  a  pound  of  silver,  so 
that  the  pound  sterling  is  but  three-tenths  of  a  pound's  weight  of  silver.  Sev- 
eral English  monarchs,  notably  Henry  VIII.,  also  debased  their  coinage  secretly 
by  alloy.  One  of  the  Spanish  gold  coins,  a  maravcdi,  was  debased  in  quality 
till  it  became  only  copper.  People,  however,  may  go  on  taking  this  debased 
money,  and  calling  it  by  the  old  name  for  a  long  time,  and  one  of  the  great 
economists,  Eicardo,  sets  it  down  as  a  law  of  seigniorage  that  a  debasement  of 
coins  does  not  itself  produce  depreciation  of  currency,  so  long  as  no  more  is 
issued  than  the  people  really  need  in  their  exchanges.  This  is  true  so  long  as 
the  people  are  willing  to  take  the  poor  money  as  good,  either  because  they  can- 
not get  better,  or  because  they  do  not  know  better,  or  because  of  habit,  or  be- 
cause the  law  tells  them  to.  But  when  they  begin  to  get  afraid  of  the  debased 
money,  and  prices  start  up,  so  that  a  dollar  in  wages  does  not  buy  in  cheap 
money  what  it  did,  and  they  take  to  barter  or  modify  or  limit  their  production, 
then  come  "bad  times."  The  people  who  earn  wages,  and  the  small  shop- 
keepers, feel  the  effect  worst.  This  happened  in  1883,  when  our  "trade  dol- 
lar "  stopped  circulating ;  th.e  poor  people  and  country  stores  could  buy  only 
85  cents'  worth  with  the  dollar  they  had  taken  for  a  hundred  cents. 

Paper  as  Money. 

Even  the  precious  metals  weigh  a  good  deal,  and,  in  large  amounts,  are  in- 
convenient to  carry  or  to  keep.  If,  therefore,  a  government,  or  a  bank,  or  a 
trustworthy  person,  will  keep  the  coin  for  the  owner,  and  give  him  paper  cer- 
tificates that  it  is  held  by  them,  he  likes  these  better,  though  they  are  only 
pieces  of  paper,  worth  nothing  in  themselves.  They  are  like  the  title-deeds  of 
a  house.  The  "gold  certificates"  and  "silver  certificates"  of  the  United 
States  are  of  this  sort.  Such  paper  is  ' '  representative  money  "  in  the  strict- 
est sense,  since  each  "dollar"  represents  an  actual  dollar  in  metal-money, 
and  it  is  "  convertible  "  at  any  moment  into  metal-money.  The  metal  remains 
unused,  while  the  paper  passes  current  from  hand  to  hand  in  its  place,  as  cur- 
rency. 

Now,  a  banker  finds  that  this  unused  money  is  not  called  for  by  its  real 
owners  all  at  the  same  time.  If  they  permit  him  to  use  or  loan  part  of  the 
metal,  he  can  make  a  profit  for  them  or  for  himself  or  for  both  by  getting  inter- 
est for  it,  keeping  enough  "reserve"  of  metal  to  pay  the  demands  presented 
each  day.     The  Bank  of  Sweden,  founded  in  1057,  early  issued  "bank  money," 

3.34 


PRINCIPLES    OF   MONEY   AND   BANKING. 


or  notes  undertaking-  to  pay  to  the  bearer  at  sight  a  certain  amount  of  metaJ- 
money.  So  long  as  such  money  can  actually  be  had  ou  demand  for  the  paper, 
this  kind  of  paper  currency  is  also  "  convertible." 

If,  however,  the  bank  managers  make  a  mistake,  ar:d  do  not  keep  enough 
reserve,  the  holders  of  notes  may  become  frightened  and  make  a  ''  run  "  on  the 
bank  to  get  their  part  of  the  metal  out  before  other  depositors  use  up  the 
supply.  The  bank  may  then  have  to  "  suspend  payment "  until  it  can  "  realize  " 
on  the  securities  it  has  taken  for  loans ;  that  is,  get  real  money  for  them.  If 
enough  people  are  scared  to  make  a  general  '*  panic,"  it  will  be  very  hard  to  get 
the  real  money  even  by  selling  the  securities  at  a  loss.  Thus  notes  which  were 
called  "convertible"  become  "inconvertible,"  because  you  cannot  on  demand 
convert  them  into  the  metal-money  for  which  they  are  supposed  to  stand.  Their 
power-in-exchange,  or  value,  will  be  no  longer  *'  as  good  as  gold,"  but  will  depend 
on  the  confidence  people  have  in  the  ability  of  the  issuer  to  pay  by-and-by. 

During  the  war  our  Government,  not  having  enough  money  for  its  needs, 
said  to  the  soldiers  and  the  shopkeepers  :  "  We  cannot  pay  you  money  now,  but 
we  will  some  time ;  meanwhile  these  pieces  of  paper  are  evidences  of  debt, 
which  other  citizens  must  accept  from  you  as  money."  These  were  the  "legal- 
tenders,"  a  paper  currency  inconvertible  at  the  time  of  its  issue,  but  which 
became  convertible  when  the  United  States  "  resumed  "  specie  payment,  Janu- 
ary 1,  1879.  It  was  a  mortgage  on  the  earnings  of  the  people,  to  be  collected 
by  future  taxes.  Other  governments,  when  hard  up,  have  done  the  same  thing, 
but  usually  their  currency  has  not  been  made  good.  The  assignats  of  the 
French  Revolution  assigned  to  the  holders  the  lands  seized  by  the  State,  but  few 
holders  got  the  lands  or  saw  their  money  again ;  our  Continental  currency  in 
like  manner  became  worth  nothing.  Inconvertible  currency  of  this  sort  is  not 
representative  of  wealth,  but  evidence  of  debt :  it  is  promises-to-pay,  or  credit- 
money.  A  government  may  use  its  authority  to  force  a  loan  and  give  such  cur- 
rency compulsory  circulation,  but  its  power-in-exchange,  like  that  of  incon- 
vertible bank  money,  depends  at  once  on  the  confidence  in  its  being  made  good. 
In  the  dark  days  of  the  war  greenback  dollars  bought  less  than  forty  cents  gold 
would  buy;  and  when  the  Government  tried  lo  prevent  their  further  fall  by 
prohibiting  dealings  in  gold,  people  only  lost  confidence  all  the  more,  and  green- 
backs bought  still  less. 

The  economist  Ricardo  points  out  that  government  inconvertible  currency 
is  like  a  coinage  debased  its  entire  value,  for  the  cost  of  printing  is  almost 
nothing.  According  to  his  "law  of  seigniorage,"  such  a  debased  currency 
does  not  necessarily  depreciate  or  buy  less  than  its  face-value,  if  no  more  of  it 
is  put  in  circulation  than  the  public  need.  But  usually  people  become  afraid 
that  it  is  not  worth  its  face-value  ;  it  falls — ue.,  buys  less  ;  more  is  needed  to 
make  the  same  amount  of  purchases;  and  thus  depreciation,  inflation  of  prices, 
speculation,    and  all  their  train  of  ills  set  in.      There  have  been  very  few 

3.25 


l»RmCIPLES    OF    MONEY    AND    BANKING. 


cases  where  an  inconvertible  currency  has  kept  at  par  (of  equal  value)  with 
gold.  The  Bank  of  England  notes  from  1797  to  1808  (after  which  date  they 
iiell),  and  those  of  the  Bank  of  France  in  1848  and  after  1871,  are  almost 
the  only  instances. 

We  cannot,  in  short,  speak  of^"  paper  money  "  as  though  it  were  all  of  one 
kind  or  one  quality — all  good  or  all  bad.  We  must  discriminate,  as  we  would 
between  a  2.40  trotter  and  a  tread-mill  sack-of-bones,  though  each  is  called  a 
horse.  Economists  dispute  fiercely  as  to  whether  paper  can  or  can  not  be 
' '  money,"  but  this  is  really  a  quarrel  about  words.  ' '  Money  is  that  money  does," 
says  one  economist.  Some  use  the  word  ' '  money ' '  to  cover  any  substitute,  others 
only  for  the  metal  or  other  value-money  itself.  The  last  is  the  original  mean- 
ing and  does  not  mislead,  and  paper  is  more  accurately  called  substitute-money 
or  currency.  As  a  common  medium  of  exchange,  paper  is  more  convenient 
than  metal ;  it  costs  less  to  print  it  than  to  make  coins.  If  paper  is  worn,  or 
lost,  or  destroyed,  in  transit,  no  wealth  is  lost  ;  without  it  the  great  volume  of 
modern  trade  could  scarcely  have  developed,  and  the  lack  of  circulating  medium 
would  have  greatly  disturb3d  prices.  It  has  accordingly  been  used  for 
many  centuries;  Marco  Polo  found  a  paper  currency  of  mulberry -bark 
in  China  before  1300.  Adam  Smith  likens  it  to  a  highway  in  the  air,  leaving 
the  old  roads  for  crops.  But  as  a  common  measure  of  value,  it  really  depends 
on  its  own  relations  to  metal-money,  and  as  a  standard  of  deferred  payments 
and  a  storer  of  values  it  may  prove  ruinously  treacherous.  When  "green- 
backs" fell  to  40  per  cent.,  all  who  owed  debts  gained,  for  the  moment  ;  "when 
they  rose,  all  who  owed  lost — in  neither  case  by  their  own  doings.  An  incon- 
vertible paper  currency  is  usually  costly  in  the  long  run.  We  honor  the 
"blood-stained  greenback  "  for  its  help  in  the  war  ;  but  if  our  financiers  could 
have  avoided  paper  currency — as  Napoleon,  after  the  paper  collapse  of  France, 
did  throughout  his  great  wars — we  might  have  been  saved  the  enormous  loss  of 
paying  out  an  forty  cents  and  redeeming  at  a  hundred.  Steadfastness  is  the 
great  safeguard  of  sober  industry,  and  paper  currency  has  been  called  ' '  the 
alcohol  of  commerce  "  and  "  mock  money. "  "In  the  land  of  Mendacity,"  says 
an  Italian  writer,  "  they  use  only  paper  money." 

Paper  currency  lacks  also  the  final  quality  of  real  money — universality,  for 
it  is  "good  "  only  within  the  bounds  of  the  credit  of  the  country  which  issues 
it.  Metal-money  helps  tr&de  to  regulate  itself.  If  sugar  is  cheap  in  the  West 
Indies,  i.  e.,  money  dear,  or  if  a  great  wheat  crop  has  brought  us  an  excess  of 
metal  (which  the  United  States  produces  and  usually  exports)  i.  e.,  money  is 
cheap,  money  flows  from  us  to  the  W^esfc  Indies  and  we  get  our  sugar  cheap. 
But  if  we  have  a  debased  money,  the  natural  course  of  trade  is  checked  and  we 
lose  the  profit. 

Also,  when  full-value  and  debased  currency  are  circulating  together  with 
the  same  purchasing  power,  "bad  money,"  as  stated  by  what  is  called  Gres- 

3.26 


PRINCIPLES   OF   MONEY   AND   BANKING. 


ham's  law,  "always  drives  out  good  money,"  which  people  hoard  or  send  away 
where  they  cannot  use  the  bad  money,  .  When  bad  money  thus  checks  exchange 
with  other  countries,  it  acts  at  home  to  check  production,  raise  prices,  produce 
inflation,  and  wreak  ruin.  It  shuts  out  a  country  from  the  benefit  of  the 
world's  trade,  and  makes  buyers  fewer.  Thus  "  cheap  money  "  is  dear  in  the  end. 
There  could  not  be  a  greater  misfortune  to  every  honest  worker  -  farmer, 
shopkeeper  or  mechanic — in  the  United  States  than  the  issue  of  so-called  "  fiat 
money  "  (Latin,  fiat,  let  it  be  created)  as  a  means  of  creating  wealth.  You  can- 
not make  nothing  good  for  something  by  printing  on  paper  '^  good  for  one  dollar, 
on  the  credit  of  the  United  States, ''  without  the  intention  of  ever  paying  the 
dollar.  This  would  not  be  credit  money,  because  credit  means  belief  in 
final  payment.  It  would  have  no  "  labor-value,"  nor  any  value,  because  it  would 
neither  cost  labor,  nor  represent  labor  stored  as  wealth,  nor  be  a  promise  to  pay 
labor.  The  Government  could  circulate  it  only  by  paying  it  out  for  work,  or 
for  existing  debts,  or  by  loaning  it,  or  by  giving  it  away.  If  it  were  given  away 
either  everybody  could  get  it  alike,  so  that  no  one  would  need  to  sell  real  things 
for  it,  or  a  few  in  the  ring  would  get  it  at  the  expense  of  the  naany.  If  it  were 
loaned,  the  borrowers  would  some  day  have  to  pay  back,  probably  with  a  more 
costly  currency  after  the  ''fiat  money"  had  disappeared  from  sight,  so  that  a 
mortgage  would  eat  up  the  farm  or  the  house.  If  it  were  paid  out  for  work, 
that  is,  in  wages,  a  laborer  getting  three  "dollars  "  a  day  in  place  of  one  would 
be  no  better  off,  because  the  farmer  would  require  three  dollars  instead  of  one 
for  the  wheat  which  cost  him  a  day's  work.  Prices  would  rise,  but  a  day's 
work  would  not  buy  more.  Dishonest  men  who  owed  debts  would  gain  by 
forcing  such  a  legal-tender  on  the  people  they  owed  ;  but  new  dealings  would 
be  on  special  contracts  to  pay  in  real  money,  as  in  the  time  when  greenbacks 
were  lowest,  for  no  law  can  make  a  man  sell  what  he  prefers  to  keep.  As  times 
grew  harder,  *'  more  money  "  would  be  the  cry,  as  the  drunkard  cries  for  more 
rum,  and  the  currency  would  be  worth  less  and  less.  When  the  sham  came  to 
its  end,  the  worthless  paper  would  be  not  in  the  bank  and  the  merchant's  safe, 
but  in  the  pocket  of  the  worker  and  the  till  of  the  small  shop  keeper.  This 
happened  in  the  case  of  the  silver  trade-dollar  also,  and  a  like  thing  would  hap- 
pen if  the  under-weight  silver  dollar  drove  out  gold.  All  this  is  true  as  to 
all  "cheap  money,"  that  is,  money  in  which  the  coins  have  not  full  value  or 
full  weight  in  fine  metal.  *'  Repudiation"  is  the  most  foolish  crime  of  States, 
for  it  prevents  all  credit;  "fiat  money"  is  a  repudiation  in  advance.  "A 
disordered  currency,"  said  Daniel  Webster,  is  "  the  most  effectual  of  inventions 
to  fertilize  the  rich  man's  fields  by  the  sweat  of  the  poor  man's  brow. " 

Banks  and  Banking. 

The  little  rills  up  on  the  hillsides  do  not  count  for  much,  but  when  they  fill 
the  mill-pond  the  farmer  can  grind  his  grist  and  the   woodman  can  saw  his  logs 

3.27 


PRINCIPLES    OF    MONEY   AND    BANKING. 


by  their  help,  A  bank  is  just  such  a  reservoir  of  money  stored  for  use.  The 
depositors  add  their  dollars  to  the  capital  of  the  stockholders,  and  this  money 
is  then  let  out  when  and  where  it  is  needed  for  business.  These  loans  are  often 
made  to  governments,  either  directly  or  by  buying  government  issues.  This  was, 
in  fact,. the  purpose  of  the  first  public  banks,  started  in  Italy  probably  before 
1200.  The  Greeks  had  their  trapezitea  or  bankers,  so  called  from  the  table 
{trapeza)  on  which  they  counted  out  the  money  ;  and  when  banking  was  revived 
by  the  Jewish  money-lenders  of  Italy  in  the  Middle  Ages,  each  had  his  hanca^ 
or  bench,  which  was  broken  {rotta  or  rupta)  when  he  failed  to  pay  as  he  prom- 
ised, so  he  was  said  to  become  bankrupt. 

Beside  loaning  to  governments  or  to  corporations — that  is,  buying  their 
"  bonds  "or  "  securities  " — banks  loan  their  money  to  private  persons,  such  as 
merchants,  v<rhose  promises-to-pay  are  called  notes-of-hand  or  mercantile  paper. 
The  use  of  money  is  paid  for  by  adding  an  extra  sum  called  interest  at  the  end 
of  the  time,  say  $106  for  $100  at  the  end  of  a  year,  or  by  deducting  a  like  sum 
as  discount,  the  borrower  receiving  but  $94  instead  of  the  $100  he  promises  to 
pay  a  year  hence.  If  money  is  scarce  or  times  risky,  or  the  man  doubtful,  so 
that  his  credit  (the  belief  in  him)  is  poor,  he  will  have  to  pay  greater  interest  or 
discount;  if  the  money  market  is  "easy,"  less.  The  bank  may  trust  him 
simply  on  his  note,  or  he  may  give  it  collateral — that  is,  securities  alongside 
with  his  own  promise.  This  loaning  is  the  first  way  in  which  a  bank  does  ser- 
vice and  makes  profit. 

A  bank  usually  permits  its  depositors  to  draw  on  it  orders  to  pay  money, 
called  checks,  a  word  which  comes  from  Exchequer,  the  name  given  to  the 
British  Treasury  because  it  formerly  used  a  checkered  table  like  a  chess-board 
for  convenience  in  counting.  This  enables  men  to  pay  debts  v/ithout  carrying 
about  money.  The  great  "  clearing-houses  "  in  New  York  and  London  do  this 
service  for  the  banks  themselves,  clearing  up  at  the  close  of  each  day  transac- 
tions of  millions  by  receiving  orders  on  banks  which  owe  from  banks  which  are 
owed,  and  transferring  any  small  balance  from  a  debtor  bank  to  a  creditor 
bank.     This  canceling  of  indebtedness  is  a  second  service  of  banking. 

A  bank  also,  by  the  help  of  banks  in  other  places,  collects  distant  debts.  A 
creditor — that  is,  some  one  to  whom  money  is  owed — "  draws  "  upon  the 
debtor  who  owes  him ;  the  drafts  or  order-to-pay,  is  sent  by  a  bank  in  New 
York  to  its  correspondent  bank  in  Chicago,  which  sends  out  a  runner  to  collect 
it  from  the  Chicago  debtor.  Or  it  may  be  the  debtor's  own  note  which  is  Rent 
on  for  collection.  If  he  does  not  pay,  the  bank  protests,  and  returns  the  draft 
or  note  with  an  affidavit  called  a  protest.  When  drafts  are  drawn  upon  people 
in  other  countries  they  are  called  "foreign  exchange."  The  bank  sells  to  a 
man  in  New  York  the  right  to  receive  or  transfer  in  London,  for  instance, 
money  due  by  some  other  Englishman  to  some  other  American.  This  saves 
the  risk  and  cost  of  sending  specie,  i.e.,  gold  or  silver  money  or  bullion;  and 

3.28 


PRINCIPLES    OF   MONEY   AND    BANKING. 


the  charge  for  this  service — that  is,  the  rate  of  exchange — varies,  within  the 
limits  of  the  cost  of  phipping  specie  as  freight,  according  to  vrhether  more  or 
lens  money  is  due  in  London  than  there  are  debts  to  be  paid  there.  It  costs  a 
little  over  half  a  cent  to  get  a  gold  dollar  safely  to  London  ;  the  value  of  the 
English  pound,  in  which  London  settlements  are  made,  is  reckoned  by  our  mint 
at  $4.86,"(fiy;  the  rate-of- exchange  brings  a  bill-of -exchange  perhaps  to  $4.90, 
above  which  point  it  pays  better  to  ship  gold.  This  collection  of  debts  is  a 
third  service  of  banking. 

A  bank  dealing  in  money  knows  how  much  foreign  or  debased  coins  are 
really  worth,  and  buys  them  for  that  much  current  money.  Where  there  is 
mixed  money  this  is  very  important ;  it  was  the  origin  of  the  great  Bank  of 
Amsterdam  and  of  much  of  the  mediaeval  Jewish  banking.  This  is  a  fourth 
service. 

A  bank  is  also  a  place  of  safe  deposit  for  valuables,  and  English  banking 
grew  out  of  the  business  of  the  goldsmiths,  who  took  valuables  for  safe-keeping, 
and  got  in  ihe  habit  of  advancing  money  on  them.  Many  of  the  Crusaderg  thus 
borrowed  money  of  the  Jews.  This  is  a  fifth  service  of  banking,  though  now 
"  safe  deposit  companies  "  have  taken  much  of  this  business. 

Here,  then,  are  five  kinds  of  service  which  a  bank  performs,  and  for 
which  it  rightly  earns  money,  without  touching  what  most  people  think  is  the 
chief  work  of  a  bank,  the  issue  of  paper-money.  The  earliest  "  bank  of 
issue  "  was  probably  that  of  Sweden,  founded  in  1657.  Like  each  of  the  other 
five  named,  this  service  may  or  may  not  be  a  feature  of  a  true  bank :  the 
''issue  department"  and  the  "banking  department"  of  the  great  Bank  of 
England  are  virtually  two  separate  banks,  doing  different  things.  The  issue 
of  paper-mojiey,  if  wisely  done,  is  a  sixth  service,  but  it  includes  the  greatest 
danger  of  the  banking  business.  In  England  only  the  Bank  of  England,  which 
is  the  financial  representative  of  the  Government,  can  issue  bank-notes,  and, 
above  £15,750,000  represented  by  securities  (of  which  the  £11,000,000  owed  by 
the  Government  to  the  bank  is  the  greater  part),  it  must  keep  a  pound  in  gold 
in  its  vaults  for  each  pound-note  issued.  This  is  the  result  of  Sir  Robert  PeePs 
famous  Bank  Act  of  1844,  in  which  the  advocates  of  the  "  banking  principle  " 
upheld  by  Thomas  Tooke,  who  argued  that  so  long  as  you  can  actually  get 
gold  for  your  bank-note  there  is  no  need  of  limiting  issues  by  law,  were 
defeated  by  those  who  held  to  the  "  currency  principle,"  led  by  Lord  Overstone, 
who  argued  that  without  such  limitation  currency  is  almost  sure  to  be  over- 
issued and  so  inflate  prices  by  its  depreciation.  Our  "National  currency," 
issued  by  the  National  Banks,  is  protected  by  a  deposit  with  the  United  States 
Treasury  of  Government  bonds,  against  which  only  ninety  per  cent,  of  their 
face-value  can  be  issued  in  currency,  and  by  the  Government  guaranty  of 
receiving  it  for  all  dues  except  interest  on  the  public  debt.  These  banks  also 
keep  a  gold  reserve,  usually  about  13  per  cent,  of  their  notes. 

3.29 


PRINCIPLES   OF   MONEY   AND   BANKING. 


The  one  purpose  of  all  these  branches  of  the  banking-  business  is  to  make 
the  most  of  the  existing  stock  of  capital.  Safely  done,  this  helps  everybody. 
Careless  banking,  on  the  contrary,  cripples  all  business.  The  need  of  banks 
wherever  people  do  business  is  shown  by  the  fact  that  when  a  little  place  starts 
up  in  the  West;,  the  keeper  of  the  country  store  becomes  virtually  banker 
for  the  place  until  a  public  bank  is  started.  The  "  wild-cat"  banks  before  the 
war  at  the  West,  nevertheless,  did  a  great  deal  of  harm :  they  issued 
great  quantities  of  paper-money,  kept  as  little  as  two  per  cent,  of  specie,  and 
failed  to  pay  their  notes.  The  country  was  cursed  with  paper-money,  much 
counterfeited,  from  hundreds  of  banks  of  all  shades  of  credit,  which  no  one 
would  take  until  he  could  look  up  the  facts  in  the  *'  Bank-note  Detector/' 
issued  monthly  in  those  days.  This  system  of  banks  chartered  by  the  States 
was  largely  superseded,  early  in  the  war,  by  the  system  of  National  Banks, 
under  acts  of  February  25,  18G3,  and  June  3,  18G4.  The  greatest  amount  of 
notes  authorized  was  $354,000,000,  which  was  never  quite  reached.  These 
notes  were  covered  by  the  deposit  of  United  States  bonds,  and  gave  a  safe  and 
convenient  currency,  similar  to  the  "greenbacks."  The  profit  of  interest  and 
on  lost  notes,  as  in  the  case  of  State-bank  notes,  is  made  by  the  banks,  and  not, 
as  in  the  case  of  "greenbacks,"  by  the  Government ;  but  this  is  perhaps  com- 
pensated for  by  the  service  done  by  the  banks,  and  the  regulation  of  the  cur- 
rency by  the  needs  of  business  instead  of  by  arbitrary  law.  The  present 
problem  of  banking  is  what  securities  can  be  used  as  a  basis  of  National -bank 
notes,  as  the  Government  pays  its  debt  and  withdraws  its  bonds. 

In  1895,  there  were  3,712  National  Banks,  with  $657,000,000  capital, 
$1,715,000,000  deposits,  and  $182,000,000  circulation;  there  were  also  re- 
ported 1,017  savings-banks,  with  $1,844,500,000  deposits;  and  5,0.86  State  and 
private  banks  and  trust  companies,  with  $392,500,000  capital,  and  $1,840,800,- 
000  deposits — these  being  but  partial  returns  ;  so  that  we  have  over  9,800  banks, 
with  probably  $1,050,000,000  capital,  and  nearly  $5,000,000,000,000  deposits. 

Savings-banks  are  confined  usually  to  receiving  deposits  in  small  sums,  and 
pay  the  depositors,  in  interest  and  dividends,  the  whole  profit  from  the  loaning 
of  this  money.  They  are  governed  by  trustees  representing  the  depositors, 
only  a  few  having  separate  capital  and  stockholders,  and  they  are  restricted  by 
law  from  loaning  except  on  specified  security.  In  England  the  Post-office 
Department  is  a  great  savings-bank,  receiving  savings  in  postage-stamps  or 
money  at  each  post-office,  and  loaning  the  total  to  Government  by  investing  it 
in  Government  bonds. 

Banks,  we  have  seen,  are  really  stores  which  deal  in  money,  collecting  it 
and  letting  it  out  much  as  a  grocer  buys  and  sells  groceries.  They  give  credit 
for  money  just  as  a  grocer  would  give  credit  for  goods.  But  because  money 
is  the  general  medium  of  exchange,  and  banks  are  usually  public  institutions, 
the  bank  reports,  showing  the  "reserve  "  held  by  them,  show  the  commercial 

3.30 


PRINCIPLES   OF   MONEY   AND   BANKING. 


condition  Of  the  community  mucli  as  a  Bteam-gauge  shows  the  pressure  m  a 
steam-engine.  When  money  is  -  scarce  "  and  much  wanted,  or  when  times  are 
risky,  bankers  charge  a  greater  rate  of  interest  or  discount;  and  as  London  is 
the  great  banking  centre,  the  rate  made  from  week  to  week  by  the  governors 
of  the  Bank  of  England,  usually  varying  between  3  and  4  per  cent.,  is  an  indi- 
cation of  the  state  of  trade  in  the  whole  world.  Bankers  need  to  be  very  wise 
in  these  matters,  else  the  community  may  be  tempted  into  over-speculation  by 
too  free  loans  or  frightened  into  panics  by  over-caution.  Thus  the  useiulness 
of  any  bank,  and  of  the  whole  banking  system,  depends  upon  the  honesty  and 
good  judgment  of  the  men  conducting  it.  No  law  can  prevent  foolish  people 
from  putting  money  into  swindles  which  call  themselves  "banks  or  bank- 
ers," and  such  people  must  pay  the  penalty  in  loss.  But  a  system  of  sound 
branch  banks  throughout  the  country,  like  that  in  Scotland,  is  a  great  boon  to 
a  people. 


3.31 


THE    DEMOCRATIC    PARTY— ITS    HISTORY    AND 
PRINCIPLES.* 

It  is  just  about  one  hundred  years  ago  that  the  Democratic  party  in  the  United 
States  was  born  of  the  theoretical  and  philosophical  temper  which  pervaded 
Europe  and  America  in  the  latter  years  of  the  last  century,  and  the  practical 
fruit  of  which  had  been  the  destruction  of  monarchical  institutions  in  America 
and  France.  Instead  of  dealing-,  as  typical  Anglo-Saxons  would  have  dealt,  as 
probably  Hamilton  and  John  Adams  would  have  dealt,  only  with  the  particular 
wrongs  and  inconveniences  of  British  oppression,  the  genius  of  Thomas  Jeffer- 
son had,  in  the  Declaration  of  Independence  fifteen  or  twenty  years  before, 
made  the  thirteen  colonies  define  the  whole  reason  and  framework  of  govern- 
ment. Much  of  what  he  said  now  seems  truism.  It  was  the  supreme  merit 
of  his  career  that  he  turned  truths  into  truisms.  He  declared  the  theoretical 
rights — what  he  called  the  "inalienable  rights" — of  man;  he  declared  the 
justification  of  government  to  be  its  ability  to  secure  those  rights ;  he  declared 
respect  or  obedience  to  be  due  government  solely  as  in  actual  practice  it  secured 
those  rights.  Whenever  government  ceased  to  perform  this  practical  VvOrk,  it 
was  only  prudence,  and  never  awe,  which  should  restrain  citizens,  if  they  were 
to  be  restrained  at  all,  from  overthrowing  it.  Divinity  was  no  longer  to  hedge 
it  around. 

Very  soon  after  the  end  of  the  American  Revolution  Jefferson  went  to  Paris, 
where  he  lived  during  several  years  of  the  intellectual  ferment  which  preceded 
the  cataclysm  of  the  French  Revolution.  After  our  Constitution  was  formed 
and  Washington's  administration  was  well  under  way,  Jefferson,  returning 
home,  was  still,  or  perhaps  more  zealously,  an  apostle  of  the  rights  of  man — a 
thoroughgoing  iconoclast  toward  every  image  of  government  as  an  earthly 
deity.  To  his  influence  we  probably  owe  the  first  ten  amendments  of  the 
Federal  Constitution — that  bill  of  rights  which  has  been  so  largely  copied  into 
the  constitutions  of  the  American  States.  They  form  a  series  of  declarations 
of  jealousy  of  government,  or  rather  of  the  bodies  of  men  who  from  time  to 
time  compose  government.  Their  meaning  is  that  the  price  of  liberty  is  eternal 
vigilance  toward  rulers — not  less  toward  rulers  elected  by  the  people  than 
toward  those  set  over  the  people  by  the  once  useful  but  now  absurd  system  of 
primogeniture.  While  he  was  the  nominal  head  of  Washington's  Cabinet,  Jef- 
ferson and  his  friends  viewed  with  intense  dislike  the  effort  of  Hamilton  and 
his  friends  to  form  into  a  governing  class  the  citizens  who  had  property,  the 
citizens  who,  through  a  dangerous  slip,  were  called  the  "  well-born,"  and  their 

*  Condensed  and  revised  from  an  Address  by  Edward  M.  Shepard,  Brooklyn,  1892. 

3.32 


THE   DEMOCRATIC   PARTY. 


effort  to  lodge  in  the  Federal  Government  the  chief  political  powers  of  every 
State.  Hamilton  had  proposed  life-tenure  for  the  President  and  Senators,  and 
the  appointment  of  the  Governors  of  the  States  by  Federal  authority,  with  the 
power  to  every  Governor  of  an  absolute  veto  upon  the  legislation  of  his  State. 
In  our  admiration  for  his  great  powders,  and  our  gratitude  for  his  splendid 
services  in  setting  up  the  framework  of  our  Government,  it  is  sometimes  for- 
gotten that  the  Federal  Constitution  is  a  radically  different  thing  from  what 
Hamilton  would  have  had  it;  that  but  little  of  it  is  his  handiwork;  that  it 
represents  quite  as  much,  to  say  the  least,  the  Democratic  view  as  the  Federal- 
ist view  of  American  politics.  In  private  Hamilton  declared  it  to  be  a  *'  frail 
and  worthless  fabric."  Democracy — and  by  that  he  meant  the  eager  jealous 
participation  of  all  citizens  in  the  government,  as  well  those  whom  he  deemed 
unimportant  and  incompetent  as  those  who  held  responsible  places  in  the  com- 
munity and  were  skilled  in  affairs — Democracy  he  declared,  just  before  his 
death,  to  be  a  "  virulent  poison." 

From  the  time  of  Jefferson's  return  to  America  and  his  appointment  as 
Secretary  of  State  in  1790  until  his  inauguration  as  President  in  1801,  the 
Democratic  parLy  was  in  its  first  stage  ;  and  in  that  stage  it  tended  toward 
extreme  opposition  to  the  Hamiltonian  views.  In  the  formation  of  lasting 
popular  opinion,  in  permanently  molding  the  political  instincts  and  institutions 
of  America,  and  in  setting  up  ideals  which  have  in  our  land  grown  stronger 
and  stronger  with  the  lapse  of  time,  the  genius  of  Jefferson  was,  with  the 
possible  exception  of  that  of  Franklin,  the  most  fruitful  which  our  country 
has  known.  Within  twelve  years  after  our  present  Government  began  he  had 
gathered  a  majority  of  the  people  of  the  United  States  into  an  organization 
then  called  the  Republican,  afterward  called  the  Democratic-Republican,  and 
finally,  and  until  the  present  time,  called  the  Democratic  party.  During  that 
period  the  principles  of  the  party  were  well  settled.  They  appear  in  Jefferson's 
political  papers,  in  his  incessant  correspondence,  in  the  Virginia  and  Kentucky 
resolutions,  for  both  of  which,  doubtless,  Jefferson  and  Madison  were  largely 
responsible,  and  in  a  great  wealth  of  political  and  party  literature  more  or  less 
doctrinaire. 

The  Democratic  principles  were  in  substance  these :  First,  just  government 
is  a  mere  instrument  for  accomplishing  certain  useful  and  practical  purposes 
which  citizens  in  their  other  relations  can  not  accomplish,  and  primarily,  and 
chiefly,  to  protect  men  as,  without  trespass  upon  others,  they  pursue  happi- 
ness in  their  own  way.  Every  effort,  by  ceremonial  or  otherwise,  to  ascribe 
to  government  virtue  or  intelligence,  or  invite  to  it  honor,  not  belonging  to  the 
men  who  compose  it,  is  an  effort  against  the  public  welfare.  Second,  the  less 
government  does,  the  more  it  leaves  to  individual  citizens  to  do,  the  better. 
Every  grant  of  power  to  government  ought,  therefore,  to  be  strictly  and 
jealously  construed   as  impairing  to  some   extent  the  natural  rights  of  men. 


3.33 


THE   DEMOCRATIC   PARTt. 


Third,  there  should  be  the  maximum  of  local  self-government.  Where  it  is 
doubtful  between  the  Federal  Government  and  a  State,  or  between  a  State  and 
a  lesser  community,  which  should  exercise  a  power,  the  doubt  ought  to  be 
solved  in  favor  of  the  government  nearer  the  home,  and  more  closely  under 
the  eye  of  the  individual  citizen.  Fourth,  it  follows  that  the  expenditure  of 
money  by  the  Government  ought  to  be  the  least  possible  ;  the  collection  and 
disbursement  by  public  officials  of  money  earned  by  other  men  tends  to  cor- 
ruption, not  only  in  the  jobbery  and  thievery  more  or  less  attending  irrespons- 
ible expenditure  of  money,  but  perhaps  more  seriously  in  its  tendency  to 
create  in  the  minds  of  citizens  a  sense  of  dependence  upon  government.  And 
ffth^  to  sum  up  all  the  rest,  the  Government  should  make  the  least  possible 
demand  upon  the  citizen,  and  the  citizen  the  least  possible  demand  upon  the 
Government.  The  citizen  should  never  suppose  that  he  can  be  made  virtuous 
by  law,  or  that  he  ought  to  be  helped  to  wealth  or  ease  by  those  of  his  fellows 
who  happen  to  hold  the  offices,  and  for  that  reason  to  be  collectively  called 
"the  Government." 

Such  was  the  Democratic  creed  at  its  beginning;-  and,  in  spite  of  many 
lapses,  such  the  creed,  at  least  as  a  creed,  has  remained  until  the 
present  time.  Certain  constructive  functions,  like  the  post-office  iu  the 
Federal  administration,  or  the  care  of  streets  in  municipal  administration,  it  is 
admitted— it  was  then  admitted — must  be  performed  by  the  Government. 
Those  constructive  functions,  with  the  increase  in  wealth  and  complexity  of 
modern  life,  tend  to  increase  in  number  and  importance.  But,  as  to  each  one 
of  them,  the  burden  is  upon  those  who  would  have  the  Government  assume  it, 
to  show  that  government  is  fit  for  it ;  and  by  government  is  always  meant  the 
men  actually  making  up  the  administration,  with  all  the  limitations  upon  their 
intelligence  and  integrity,  and  with  all  the  disadvantages  incident  to  the  per- 
formance of  business  by  those  who  bear  but  an  insignificant  part  of  its  bur- 
dens. It  is  with  ample  regard  to  these  considerations  that  we  should  determine 
as  to  each  constructive  work,  whether  it  ought  to  be  done  by  some  division  of 
the  Government.  The  main  purpose  and  justification  of  government  is,  in 
every  response  of  the  Democratic  litany,  and  with  ceaseless  iteration,  declared 
to  be  the  protection  of  the  individual  citizen  in  best  and  most  freely  exercising 
his  calling  and  in  living  his  life  without  trespass  upon  the  like  freedom  of  his 
neighbor.  Long  before  the  birth  of  Herbert  Spencer  the  best  of  the  propo- 
sitions of  Social  Statics  was  an  axiom  of  the  Democratic  party.  The  creed  is 
to  many  neither  warm  nor  inspiring.  It  declares  that  equal  justice  to  all  men 
is  the  only  generosity  which  government  sh'ould  promote.  It  says  :  "Let  each 
man  take  care  of  himself.  Let  no  man,  through  the  power  of  popular 
majorities,  shift  his  burdens  upon  other  men." 

Out  of  the  triumph  of  this  creed,  which  the  first  year  of  our  century 
brought,  and  incidental  to  that  triumph,  have  come  many  things  unpleasant  to 

3.34 


THE   DEMOCRATIC   PARTY 


well-ordered  citizens.  The  refusal  to  recognize  public  men  as  a  class  possess- 
ing esoteric  knowledge,  the  admiration  for  the  plain,  simple  man,  has  not 
infrequently  led  the  American  people  to  put  incompetence  and  stupidity  into 
oihcial  place.  The  dislike  of  forms,  the  determination  to  deal  with  realities, 
has  sometimes  led  to  the  neglect  of  forms  necessary  to  thoroughness,  precision 
and  convenience.  Whatever  were,  whatever  still  are,  the  blemishes  of  its 
fruits,  such  was  the  Democratic  creed  when  Jefferson  entered  the  White 
House. 

From  1801  until  1825  the  Democratic  party  was  in  control  of  the 
machinery  of  government.  At  the  end  of  that  time  there  was  no  opposition. 
When  the  presidential  election  of  1824  took  place  each  candidate  was  declared 
by  his  supporters  to  be  the  best  Republican  of  them  all.  John  Quincy  Adams 
and  Henry  Clay,  quite  as  much  as  Andrew  Jackson  and  William  H.  Crawford, 
were  supposed  to  be  followers  of  Jefferson  and  Madison.  So  utterly  destroyed 
was  the  Federal  party  that  its  traditions  have  since  that  time  played  no 
practical  part  in  the  development  of  the  United  States.  The  career,  for 
instance,  of  Abraham  Lincoln  is  quite  as  far  away  from  Federalist  ideals  as  the 
career  of  Andrew  Jackson.  Both  careers  were  made  possible  by  the  surrender 
of  the  land  to  the  political  ideas  of  the  philosophers  who  were  our  Presidents 
during  the  first  sixteen  years  of  the  century.  Not,  however,  that  all  the  Demo- 
crats were  mere  theorists.  There  were  among  the  Democratic  statesmen  of  the 
time  several  able  administrators.  Gallatin,  for  instance,  was  one  of  the  greatest 
executives  our  country  has  known.  The  Clintons,  and,  among  the  younger 
men,  Van  Buren,  were  highly  competent  in  the  efficient  transaction  of  the 
business  of  government.  Never  have  our  national  finances  been  better  cared 
for. 

When  John  Quincy  Adams  became  President  he  determined,  although  with- 
out recurrence  to  the  ceremonial  features  of  Federalism,  to  make  the  Washing- 
ton Government  a  firmer,  abler  institution,  to  start  it  in  the  way  of  construct- 
ive work,  to  make  it  open  the  great  highways  through  the  country,  to  make  it 
influential  abroad.  Joined,  as  Adams  was,  by  the  attractive  abilities  and 
character  of  Henry  Clay,  the  Whig  party  was  formed  during  this  administra- 
tion ;  and  from  the  election  of  1828,  in  which  Adamg  was  defeated  for  re-elec- 
tion, until  1844,  the  Democratic  theories  of  government  were  ably  and 
patriotically  attacked  by  some  of  the  most  famous  Americans.  Under  Jackson 
an4  Van  Buren  the  Democratic  party  dissolved  the  close  alliance  between  the 
Federal  Government  and  the  banks.  The  Federal  Government  was  not, 
directly  or  indirectly,  to  loan  money  to  its  citizens,  for  that  was  the  proposition 
substantially  maintained  by  the  Whigs  in  the  bank  controversy.  Since  then  Gov- 
ernment has  indeed  deposited  moneys  with  banks,  but  only  as  a  mere  convenience, 
and  never  under  a  general  policy  of  helping  bankers  or  merchants.  Under  Jackson 
and  Van    Buren  the    Democratic  party  showed  genuine  energy  and  ability 

3.35 


THE    DEMOCRATIC    PARTY. 


of  the  first  order  in  the  executive  administration  of  affairs.  The  United  States 
has  never  known  more  forcible  administrations  than  theirs. 

From  1800  to  1844  the  Democratic  party,  being-  almost  continually  in  pos- 
session of  the  Government,  had  almost  lost  sight  of,  or  grown  lukewarm  toward, 
its  Kentucky  and  Virginia  resolutious  and  its  State  Rights  predilections.  It 
was  a  thoroughly  Union  party ;  it  was  the  Union  party.  The  disunionists  were 
for  some  years  chiefly  New  England  Federalists.  In  1833  there  was  the  later 
outbreak  of  disunion  in  South  Carolina  under  Calhoun  and  other  seceders  from 
the  Democratic  party,  in  suppressing  which  the  Democratic  administration  used 
emphatic  language  of  intense  and  peremptory  devotion  to  the  Union  which 
would  not  have  ill-fitted  an  original  Federalist.  Indeed,  if  one  will  apply  to 
politics  the  elementary  rules  of  human  conduct,  he  will  perceive  it  to  be  no 
very  wonderful  thing  that  the  party  in  possession  of  the  Federal  administration 
is  always  a  Union  party,  or  that  disunionists  are  always  men  out  of  the  control 
of  the  central  administration. 

In  Van  Buren's  presidency  occuri-ed  the  memorable  financial  crisis  of  1837 
and  183ci ;  and  his  resolute  and  unpopular  application  of  the  principle  that 
citizens  in  pecuniary  trouble  must  not  look  to  the  Federal  Government  for  loans 
of  credit  or  other  help,  but  must  work  out  their  own  salvation,  was  one  of  the 
finest  exhibitions  of  patriotic  and  far-seeing  wisdom  known  to  American  his- 
tory. In  my  opinion,  the  Democratic  party  did  not  again  reach  an  equal 
height  until  December,  1887. 

About  1844  the  slavery  question  definitely  entered  party  polities.  Slavery 
existed  only  in  the  Southern  States ;  and  in  those  agricultural  communities  the 
Democratic  party,  standing  for  low  duties  on  imports,  had  come  to  be  strong- 
est. Its  strength  there  was,  however,  quite  unrelated  to  its  opinions  on  the 
slavery  question.  But  later,  under  the  threats  of  interference  with  slavery  in 
the  States,  the  South  more  and  more  drifted  to  the  Democratic  party 
because  of  its  strict;  doctrine  of  non-interference  with  the  domestic  affairs  of  the 
States.  And  when  the  slave-owners  wished,  as  they  soon  after  did,  not  only  to 
protect  the  institution  in  the  States,  but  to  extend  it  into  new  territory, 
they  carried  the  Democratic  party  far  away  from  its  creed. 

Among  the  Democrats  there  was — there  had  always  been — a  large  anti-slavery 
feeling.  Jefferson  had  been  almost  an  abolitionist ;  out  of  the  Democratic  party 
there  later  came  to  the  Republican  party  many  abolitionists,  among  them  John  P. 
Hale,  Salmon  P.  Chase  and  David  Wilmot.  The  Southern  Democrats,  after  a 
struggle,  captured  the  ogranization  of  their  party,  and  refused  Van  Buren  the 
nomination  of  1844  because  he  was  opposed  to  the  annexation  of  Texas  and 
to  the  extension  of  slavery  which  it  meant.  From  that  time  until  the  election 
of  Lincoln  the  Democratic  party  organization  promoted,  or  at  least,  did  not 
resist,  the  demand  of  the  South.  It  was  still  a  Union  party;  in  the  opinion 
of  many  of  its  members  at  the  North,  its  Unionism  was  too  strong.     It  so  far 

8.36 


THE   DEMOCRATIC    PARTY. 


believed  in  the  Union  that  it  was  willing,  as  they  thought,  to  sacrifice  its  own 
principles  of  liberty  and  local  solf-governmont  in  order  to  preserve  the  Union. 

The  motives  of  the  chief  Democratic  leaders  of  this  period  were  patriotic 
to  a  high  degree.  Disunion  seemed  to  them  to  be  the  greatest  of  evils ;  and 
they  believed,  and  rightly,  that  disunion  must  come,  unless  concession 
after  concession  should  be  made  to  the  slave-holding  South.  The  Whig 
party  was  no  better.  It  had  become  contemptible  long  before  it  fell  to  pieces 
on  the  rise  of  the  present  Republican  party.  The  Dred  Scott  decision,  declar- 
ing that  the  Federal  Constitution,  of  its  own  force,  carried  slavery  into  all  the 
territories,  out-fed eralized  the  Federalists.  Van  Buren,  in  his  history  of 
political  parties,  quite  justly  rejoiced  to  point  out  that  Buchanan  had  been 
originally  a  Federalist  and  that  in  his  old  age  he  had  returned  to  Federal- 
ism ;  that  Taney,  the  Chief  Justice  who  had  pronounced  the  Dred  Scott  decision, 
had  likewise  been  originally  a  Federalist  and  had  in  his  old  age  returned  to 
Federalism. 

The  present  Republican  party  was  founded  in  1854  upon  the  proposition 
that  there  should  be  no  further  extension  of  slavery.  It  was  not  an  a nti- slavery 
party  so  far  as  concerned  the  States  and  Territories  in  which  slavery  already 
existed.  Until  it  was  chosen  to  power,  it  was  not  a  Unionist  party.  On  the 
contrary,  its  leaders,  and  notably  Lincoln  and  Seward  and  Chase,  before  the 
presidential  election  of  1860,  speeches,  set  the  "  higher  law  "  above  the  Union. 
The  Democratic  party  being  at  last  turned  out  of  power  in  1861,  all  the 
Democrats  of  the  South  and  a  few  of  those  at  the  North  became  disunionists. 
The  Republican  party,  however,  immediately  upon  its  triumph  in  1860,  began 
to  turn  from  the  * '  higher  law  " ;  it  became  in  its  turn  a  Union  party.  Its  leaders 
voted  for  extreme  pro-slavery  measures,  designed  to  conciliate  the  South. 

It  is  one  of  the  amazing  facts  of  our  political  history  that  after  the  presi- 
dential campaign  of  1860,  in  which  the  Republican  party  urged  as  its  chief 
claim  to  power  its  determination  that  slavery  should  be  excluded  from  the  Ter- 
ritories, the  Republican  party  helped  in  the  early -months  of  1861,  even  Charles 
Sumner  not  opposing,  to  pass  laws  bringing  in  the  new  Territories  of  Colorado, 
Nevada,  and  Dakota  without  that  exclusion  of  slavery  for  which  alone  they 
had  come  to  power.  This  party  of  the  higher  law,  not  panoplied,  but  weighted, 
with  executive  power,  also  yielded"to  the  slave-holders  for  the  sake  of  the 
Union.  For  that  they  were  ready  to  occupy  the  position  which  the 
Democrats  had  occupied  from  1844  until  1860.  Lincoln,  though  not  a  bold 
leader,  was  a  wise  man.  Though  he  would,  as  he  himself  very  explicitly  said 
let  his  black  fellow-men  remain  in  slavery  for  the  sake  of  the  Union,  he  was 
rejoiced  when,  to  the  North,  Union  at  last  came  to  mean  abolition.  Ar.d  he 
showed  incomparable  skill  in  dealing  with  this  sentiment,  now  leading,  now 
following  it. 

During  the  war  and  the  days  of  reconstruction  the  Democratic  party  was  the 

3.37 


THE    DEMOCKATIC    PARTY. 


usual  party  in  opposition,  I  can  not  pause  to  describe  its  career  from  its  defeat 
in  18G0  until  the  revival  of  its  traditional  policy  in  1874.  I  must  say,  however, 
that  very  insufiBicient  justice  has  been  done  to  the  patriotism  of  the  great  mass 
of  Democrats  during  the  Civil  "War.  The  Union  could  never  have  been 
restored  but  for  their  general  and  effective  loyalty.  If  during  the  war  there  bad 
been  no  constitutional  opposition  from  that  party,  if  in  its  ranks  there  had  not 
been  at  least  two-fifths  of  the  loyal  people  of  the  North,  the  Union  would  have 
been  restored  shorn  of  some  of  its  chief  merits,  and  with  a  framework  very 
different  from  that  which  had  been  set  up  by  the  fathers,  and  which  so  won- 
derfully survived  the  flame  and  destruction  of  our  great  struggle. 

In  1874  the  Democratic  party  was  taken  firmly  in  hand  by  Samuel  J.  Tilden 
and  his  coadjutors.  Gov.  Tilden  was  deeply  imbued  with  the  traditional  princi- 
ples of  his  party.  He  had  been  an  admiring  pupil  of  Van  Buren,  who  had  him- 
self been  a  disciple  of  Jefferson.  He  had  joined  Van  Buren  in  the  Free- Soil  revolt 
of  1848  against  the  dictation  of  the  slave  holders.  When  that  revolt  had  failed 
he  had  returned  to  the  party,  and  there  stayed  during  the  unionist  period  of  the 
Democratic  party  which  I  have  described.  He  was  elected  Governor  of  New 
York  in  1874  upon  a  platform  whose  distinctly  and  tersely  drawn  propositions 
were  completely  Jeffersonian.  The  Federal  Government  must  not  issue  fiat 
paper ;  it  must  not  promote  manufactures  or  any  kind  of  business  at  the 
expense  of  those  not  engaged  in  it ;  it  must  not  meddle  with  the  affairs  of  the 
several  States  ;  a  civil  service  law  must  destroy  those  evils  of  patronage  which, 
however  much  practiced  by  Democrats,  had  been  among  the  most  flagrant  viola- 
tions of  Democratic  principles.  With  Tilden' s  success  there  came  into  the 
administration  of  the  Democratic  party  a  body  of  younger  men,  of  superior 
intelligence,  of  great  sincerity,  and  warmly  devoted  to  the  traditions  of  the 
party.  Indeed  their  devotion  was  one  of  the  most  honorable  and 
effective  tributes  paid  him.  After  the  electoral  controversy  of  1877, 
and  his  failure — through  a  scandalous  and  criminal  perversion  of 
the  popular  will — to  actually  reach  the  White  House,  reaction  from  a  steadfast 
course  set  in,  as  it  had  more  than  once  before.  In  1880  the  Democratic  party, 
shrinking  from  its  own  principles  and  abandoning  its  own  leader,  met  a  defeat 
not  altogether  undeserved.  When  at  last,  in  March,  1885,  it  secured  the 
Presidency,  the  business  and  practical  requirements  of  administration  of  a 
great  machine  of  Government  long  set  up  were  so  great,  and  the  temper  of  Mr. 
Cleveland  and  his  associates  was  rightly  so  practical,  that  considerable  time 
elapsed  before  Democratic  theories  could  be  put  in  practice  or  even  very 
distinctly  enunciated.  In  a  series  of  veto  messages,  however,  in  the  latter 
part  of  his  administration,  and  especially  in  his  famous  tariff  messages  of 
1887,  and  in  his  annual  message  of  1888,  after  his  defeat,  there  was  clear 
and  definite  return  to  the  traditional  principles  of  the  Democratic  party. 
He  enimciated,  in  a  phrase  of  his  own,  the  sura  of  them  all,  when  he  said 

3.38 


THE   DEMOCRATIC   PARTY. 


that  it  was  for  the  citizen  to  support  the  Government,  and  not  for  the  Gov- 
ernment to  support  the  citizen. 

The  great  parties  of  the  United  States  have  never  differed  as  to  the  duty 
of  the  Federal  Government  to  coin  money.  So  that  the  mere  question  whether 
or  not  silver  shall  be  as  freely  coined  as  gold  does  not  involve  the  great  differ- 
ence of  principle  between  the  two  parties.  But  we  know  that  few  people  are 
interested  in  the  abstract  question  of  bimetallism  dealt  with  by  the  economists. 
If  the  free  coinage  of  silver  could  take  place  only  at  a  rate  which  would  make 
a  silver  dollar  equal  to  the  existing  gold  dollar,  there  would  be  no  agitation  for 
free  silver.  The  reason  which  influences  the  masses  of  people — outside  of  the 
few  silver-producing  States,  who  demand  free  coinage — is  the  fact,  perfectly 
realized,  that  the  silver  dollar  proposed  to  be  coined  would  be  intrinsically  worth 
far  less  than  a  gold  dollar,  and  that,  when  coinage  becomes  free,  the  only  cir- 
culating dollar  would  be  a  silver  dollar  worth  far  less  than  the  present  dollar, 
a  dollar  to  be  obtained  for  far  less  labor — that  is  to  say,  at  far  less  cost.  This 
is  the  very  motive  which  underlay  the  paper-money  mania  after  the  war.  The 
Government  at  Washington  seems  to  the  citizen  who  does  not  observe  the  real 
springs  of  power  to  be  inimitably  powerful ;  it  can  by  law  create  a  dollar  of 
one  hundred  cents  out  of  a  bit  of  paper  or  out  of  seventy  cents'  worth  of  silver. 
So  the  pressed  and  worried  planter  or  farmer  is  tempted  by  the  illusion  against 
which  the  Democratic  party,  whenever  loyal  to  its  own  principles,  will  firmly 
protest — to  appeal  to  the  mysterious  but  imaginary  deity  who  sits  enshrined 
under  the  dome  on  that  Capitoline  Hill  which  overlooks  the  Potomac. 

No  strength  of  Government,  no  efiBciency  of  administration,  no  conscien- 
tious care  by  rulers  for  the  citizens  under  them,  will,  in  the  long  run,  bring  to 
the  welfare  and  happiness  of  the  country  a  tithe  of  what  will  come  from  the 
independent  character  of  the  citizen  himself,  from  his  pride  in  his  self-support, 
from  his  jealousy  of  interference,  and,  to  sum  it  all  up,  from  his  refusal, 
whether  by  device  or  the  brute  power  of  majorities,  to  cast  his  burden  upon 
other  men.  When  the  citizens  of  a  commonwealth  are  of  this  type,  we  need 
have  no  great  concern  about  government.  It  is  because  effect  follows  cause 
that  from  such  men  will  come  sense  and  prudence  and  integrity  in  public 
business,  efiBciency  in  political  action,  and  strength  and  thoroughness  in 
administration.  So  long  as  the  Democratic  party  in  its  life  and  practice  stands 
for  this  theory  of  government,  it  will  be  a  power  for  lasting  public  good.  So 
long  it  will  deserve,  and  I  believe  it  will  enjoy,  a  fitting  success  and  honor. 


3.39 


PUBLIC  MEN  ON  SOUND  MONEY. 

Geor(}e  Washington  : 

**  It  (inflation)  will  not  benefit  tlie  farmer  or  the  mechanic,  as  it  will  only 
enable  the  debtor  to  pay  his  debt  with  a  shadow  instead  of  a  substance." 

Robert  Morris: 

It  (unsound  currency)  has  caused  infinite  private  mischief,  numberless 
frauds  and  the  greatest  distress. 

There  is  a  great  impropriety,  not  to  say  injustice,  in  compelling  a  man 
to  receive  a  part  of  his  debt  in  discharge  of  the  whole. 

Arguments  are  unnecessary  to  show  that  the  scale  by  which  everything  is 
to  be  measured  ought  to  be  as  fixed  as  the  nature  of  things  permits  of. 

Alexander  Hamilton: 

There  is  scarcely  any  point  in  the  economy  of  national  affairs  of  greater 
moment  than  the  uniform  preservation  of  the  intrinsic  value  of  the  money  unit. 
On  this  the  security  and  steady  value  of  property  essentially  depend. 

Gold  may,  perhaps,  in  certain  senses,  be  said  to  have  a  greater  stability 
than  silver,  as  being  of  superior  value-;  less  liberties  have  been  taken  witli  it  in 
the  regulations  with  different  countries. 

Its  standard  has  remained  more  uniform,  and  it  has  in  other  respects 
undergone  fewer  changes,  as,  being  not  so  much  an  article  of  merchandise, 
owing  to  the  use  made  of  silver  in  the  trade  with  the  East  Indies  and  China,  it 
is  less  liable  to  be  influenced  by  circumstances  of  commercial  demand. 

And  if,  reasoning  by  analogy,  it  could  be  affirmed  that  there  is  a  physical 
probability  of  greater  proportional  increase  in  the  quantity  of  silver  than  in 
that  of  gold,  it  would  afford  an  additional  reason  for  calculating  on  greater 
steadiness  in  the  value  of  the  latter. 

There  can  hardly  be  a  better  rule  in  any  country  for  the  legal  than  the 
market  proportion.  The  presumption  in  such  case  is  that  each  metal  finds  its 
true  level  according  to  its  intrinsic  utility  in  the  general  system  of  money  opera- 
tion. As  long  as  gold,  either  from  its  intrinsic  superiority  as  a  metal,  from  its 
rarity,  or  from  the  prejudices  of  mankind,  retains  so  considerable  a  pre-emi- 
nence in  value  over  silver  as  it  has  hitherto  had,  a  natural  consequence  of  this 
seems  to  be  that  its  condition  will  be  more  stationary.  The  revolutions,  there- 
fore, which  may  take  place  in  the  comparative  value  of  gold  and  silver  will  be 
changes  in  the  state  of  the  latter  rather  than  in  that  of  the  former." 

President  Jefferson  : 

The  real  credit  of  the  United  States  depends  on  the  ability  and  the  immu- 
tability of  their  will  to  pay  their  debts. 

3.40 


PUBLIC   MEN   ON   SOUND   MONEY. 


The  proportion  between  the  values  of  gold  and  silver  is  a  mercantile 
problem  altogether. 

Jast  principles  will  lead  us  to  disregard  legal  proportion  altogether,  to 
inquire  into  the  market  price  of  gold  in  the  several  countries  with  which  we 
shall  principally  be  connected  in  commerce,  and  to  take  an  average  from  them. 

I  very  much  doubt  a  right  now  to  change  the  value,  and  especially  to 
lessen  it.  It  would  lead  to  so  easy  a  mode  of  paying  off  their  debts.  *  *  * 
Should  it  be  thought,  however,  that  Congress  may  reduce  the  value  of  the 
dollar,  I  should  be  for  adopting  for  our  unit,  instead  of  the  dollar,  either  one 
ounce  of  pure  silver  or  one  ounce  of  standard  silver,  so  as  to  keep  the  unit  of 
money  a  part  of  the  system  of  measures,  weights  and  coins. 

The  original  "  demonetization  of  silver"  was  effected  by  the  following  order 

from  Thomas  Jefferson  : 

Department  op  State,  ) 
May  1,  1806.  J 

Sir — In  consequence  of  a  representation  from  the  Directors  of  the  Bank 
of  the  United  States  that  considerable  purchases  have  been  made  of  dollars 
coined  at  the  Mint  for  the  purpose  of  exporting  them,  and  as  it  is  probable 
further  purchases  and  exportations  will  be  made,  the  President  [Thomas 
Jefferson]  directs  that  all  silver  to  be  coined  at  the  Mint  shall  be  of  small 
denominations,  so  that  the  value  of  the  largest  pieces  shall  not  exceed  half  a 
dollar.  James  Madison. 

Robert  Patterson,  Esq., 

Director  of  the  Mint. 

President  Madison  : 

It  is  essential  that  the  nation  should  possess  a  currency  of  equal  value, 
credit  and  use  wherever  it  may  circulate. 

President  Jackson,  Message  to  Congress,  1834  : 

The  progress  of  our  gold  coinage  is  creditable  to  the  oflBcers  of  the  Mint 
and  promises  in  a  short  period  to  furnish  the  country  with  a  sound  and  portable 
currency. 

President  Jackson,  Message  to  Congress,  1835  : 

It  is  "pleasing  to  witness  the  advantages  which  have  already  been  derived 
from  the  recent  laws  regulating  the  value  of  the  gold  coinage. 

President  Jackson,  Message  to  Congress,  1836  : 

A  depreciation  of  the  currency,  by  excessive  bank  issues  is  always  attended 
by  a  loss  to  the  laboring  classes.  This  portion  of  the  community  have  neither 
time  nor  opportunity  to  watch  the  ebbs  and  flows  of  the  money  market. 

Engaged  from  day  to  day  in  their  useful  toils,  they  do  not  perceive  that 
although  their  wages  are  nominallj''  the  same,  or  even  somewhat  higher,  they 
are  greatly  reduced  in  fact  by  the  rapid  increase  of  a  spurious  currency  which, 
as  it  appears  to  make  money  abound,  they  are   at  first  inclined  to  consider  a 

3.41     , 


PUBLIC   MET^T   ON   SOUND   MONEY. 


blessing.  It  is  not  so  with  the  speculator,  by  whom  this  operation  is  better 
understood  and  is  made  to  contribute  to  his  advantage.  It  is  not  until  the 
prices  of  the  necessaries  of  life  become  so  dear  that  the  laboring  classes  cannot 
supply  their  wants  out  of  their  wages  that  the  wages  rise  and  gradually  reach 
a  justly  proportioned  rate  to  that  of  the  products  of  their  labor. 
Secretary  Ingham,  first  Secretary  of  the  Treasury  in  the  Cabinet  of  Andrew 
Jackson,  May  4,  1830  : 

However  exactly  the  proper  equilibrium  of  values  of  gold  and  silver  may 
be  adjusted  at  the  Mint,  the  balance  is  liable  to  be  disturbed  by  causes  which 
can  neither  be  anticipated  nor  controlled  by  political  power.  If  the  regulation 
be  founded  on  the  most  exact  calculation  of  relative  values  for  the  time  being, 
the  vibrations  of  the  values  of  gold  and  silver  must  alternately  cause  the 
expulsion  of  each,  and  where  one  metal  is  more  essential  to  public  convenience 
than  the  other,  the  adjustment  which  exposes  that  under  any  circumstances  to 
general  exportation  or  melting  may  become  a  greater  evil  than  a  regulation 
which  constantly  excludes  from  circulation  the  less  desirable  coin.  *  *  * 
The  proposition  that  there  can  be  but  one  standard  in  fact  is  self-evident.  *  *  * 
The  history  of  coinage  abounds  with  mint  regulations  to  keep  gold  and  silver 
together,  and  statutes  prohibiting  under  severe  penalties  the  exportation  of 
either,  all  of  which  have  disappointed  every  expectation  of  their  projectors. 
The  adoption  of  one  metal  as  a  standard  measure  of  property  is  recommended 
by  its  simplicity.  No  change  in  the  mint  regulations  can  ever  be  required,  and  it 
removes  every  pretext  for  dishonest  or  unwise  government  to  debase  their  coins. 
Campbell  P.  White,  of  Committee  of  New  York  Bankers,  1832  : 

The  committee  think  that  the  desideratum  in  the  monetary  systera  is  the 
standard  of  uniform  xalue  ;  they  cannot  ascertain  that  both  metals  have  ever 
circulated  simultaneously,  concurrently  and  indiscriminately  in  any  country 
where  there  are  banks  or  money-dealers,  and  they  entertain  the  conviction 
that  the  nearest  approach  to  an  invariable  standard  is  its  establishment  in 
one  metal,  which  metal  shall  compose  exclusively  the  currency  for  large  pay^ 
ments. 

Democratic  Committee  of  the  House  op  Representatives,  1834 : 

The  committee  think  that  the  desideratum  in  the  monetary  system  is  a 
standard  of  uniform  value.  They  cannot  ascertain  that  both  metals  have  ever 
circulated  simultaneously,  concurrently  and  indiscriminately  in  any  country 
where  there  are  banks  or  money  dealers,  and  they  entertain  the  conviction  that 
the  nearest  approach  to  an  invariable  standard  is  its  establishment  in  one  metal, 
which  metal  shall  compose  exclusively  the  currency  for  large  payments. 
Thomas  H.  Benton,  1834 : 

It  has  an  intrinsic  value,  which  gives  it  currency  all  over  the  world  to  the 
full  amount  of  that  value  without  regard  to  law  or  circumstances. 

3.43 


PUBLIC   MEN   ON    SOUND    MONEY. 


It  haft  a  uniformity  of  value,  which  makes  it  the  safest  standard  of  the 
value  of  property  which  the  wisdom  of  man  has  ever  yet  discovered. 

Its  portability,  which  makes  it  easy  for  the  traveler  to  carry  about 
with  him. 

Its  indestructibility,  which  makes  it  the  safest  money  that  people  can 
keep  in  their  houses. 

Its  superiority  over  all  other  money,  which  gives  to  its  possessor  the  choice 
and  command  of  all  other  money. 

It  is  a  constitutional  currency,  and  the  people  have  a  right  to  demand  it 
for  their  currency  as  long  as  the  present  Constitution  is  permitted  to  exist. 

John  C.  Calhoun,  1834: 

With  these  convictions,  and  entertaining  a  deep  conviction  that  an 
unfixed,  unstable  and  fluctuating  currency  is  to  be  ranked  among  the  most 
fruitful  sources  of  evil,  whether  brewed  politically  or  in  reference  to  the  busi- 
ness transactions  of  the  country,  I  cannot  give  my  consent  to  any  measure 
that  does  not  place  the  currency  on  a  sound  foundation. 

Daniel  Webster,  1834 : 

The  very  man  of  all  others  who  has  the  deepest  interest  in  a  sound  cur- 
rency, and  who  suffers  most  by  mischievous  legislation  in  money  matters,  is  the 
man  who  earns  his  daily  bread  by  his  daily  toil. 

A  general  and  universally  accredited  currency,  therefore,  is  an  instrument 
of  commerce  which  is  necessary  to  its  just  advantages,  or,  in  other  words, 
which  is  essential  to  its  beneficial  regulation. 

A  disordered  currency  is  one  of  the  greatest  political  evils.  It  undermines 
the  virtues  necessary  for  the  support  of  the  social  system  and  encourages  pro- 
pensities destructive  of  its  happiness. 

There  are  some  political  evils  which  are  seen  as  soon  as  they  are  dangerous, 
and  which  alarm  at  once  as  well  the  people  as  the  Government. 

Wars  and  invasions,  therefore,  are  not  always  the  most  certain  destroyers 
of  national  prosperity.  They  come  in  no  questionable  shape.  They  announce 
their  own  approach,  and  the  general  securii-y  is  preserved  by  the  general  alarm. 

Not  so  with  the  evils  of  a  debased  coin,  a  depreciated  paper  currency  or 
a  depressed  and  falling  public  credit. 

These  insinuate  themselves  in  the  shape  of  facilities,  accommodation  and 
relief.  They  hold  out  the  most  fallacious  hope  of  an  easy  payment  of  debts 
and  a  lighter  burden  of  taxation. 

Credit  has  done  more,  a  thousand  times,  to  enrich  nations  than  all  the 
mines  of  all  the  world. 

The  circulating  medium  of  a  commercial  community  must  be  that  which 
is  also  the  circulating  medium  of  other  commercial  communities,  or  must  be 
capable  of  being  converted  into  that  medium  without  loss.     It  must  be  able 

3.43 


flJBLIC   MEN   ON   SOUND   MONEY. 


not  only  to  pass  in  payments  and  receipts  between  individuals  of   the  same 
society  or  nation,  but  to  adjust  and  discharge  the  balance  of  exchanges  between 
different  nations.      It  must  be  something  which  has  a  value  abroad  as  well  as 
at  home,  and  by  which  foreign  as  well  as  domestic  debts  can  be  satisfied. 
Daniel  Webster,  Speech  at  New  York,  March  15, 1837  : 

He  who  tampers  with  the  currency  robs  labor  of  its  bread.  He  panders 
indeed  to  greedy  capital,  which  is  keen-sighted  and  may  shift  for  itself,  but  he 
beggars  labor,  which  is  honest,  unsuspecting  and  too  busy  with  the  present  to 
calculate  for  the  future.  The  prosperity  of  the  working  classes  lives,  moves 
and  has  its  being  in  established  credit  and  a  steady  medium  of  payment.  All 
sudden  changes  destroy  it. 

Honest  industry  never  comes  in  for  any  part  of  the  spoils  in  that  scramble 
which  takes  place  when  the  currency  of  a  country  is  disordered.  Did  wild 
schemes  and  projects  ever  benefit  the  industrious?  Did  violent  fluctuations 
ev«r  do  good  to  him  who  depends  on  his  daily  labor  for  his  daily  bread? 
Certainly  never.  All  these  things  may  gratify  greediness  for  sudden  gain,  or 
the  rashness  of  daring  speculation,  but  they  can  bring  nothing  but  injury  and 
distress  to  the  homes  of  patient  industry  and  honest  labor. 
Samuel  J.  Tilden,  Speech  at  New  Lebanon,  October  3,  1840 : 

An  unstable  currency,  producing  instability  in  business  and  prices,  is  pecul- 
iarly injurious  to  the  farmer.  Neither  his  education  nor  his  disposition 
accustoms  him  to  watch  the  barometer  of  the  exchange.  When  he  has  con- 
ducted his  business  with  prudence  and  skill,  with  a  familiar  knowledge  and 
sagacious  estimate  of  all  the  circumstances  that  belong  to  it,  he  ought  to  be 
safe.  He  ought  not  to  be  subject  to  the  tremendous  agency  of  an  unseen  cause 
which  may  disappoint  his  wisest  calculations  and  overwhelm  him  in  sudden 
ruin.  lie  ought  to  be  secure  in  the  tranquillity  of  his  fireside  from  the  curse  of 
an  unstable  and  fluctuating  currency. 
Samuel  J.  Tilden,  Governor  of  New  York,  Message  to  Legislature,  1875  : 

Nothing  could  be  more  unwise,  more  mischievous  in  its  ultimate  results, 
than  to  interrupt  the  healing  process  of  nature  by  expedients  which  will  fail 
of  affording  any  real  relief,  and  will  be  certain  to  accumulate  new  materials  for 
another  catastrophe.  It  has  seemed  to  me  fit  that  on  this  occasion  the 
opinions  of  the  great  commonwealth  we  represent,  which  is  so  largely  interested 
in  these  questions,  should  be  declared  on  the  side  of  sound  finance,  public  in- 
tegrity, and  national  honor ;  and  in  making  this  communication  tke  medium  of 
an  authentic  expression  on  the  subject,  I  follow  the  example  on  similar 
occasions  of  several  of  the  most  illustrious  of  my  predecessors. 
Horatio  Seymour,  Governor  of  New  York,  Message  to  the  Legislature,  1864  : 

These  foreign  creditors  of  ours  are  strangers,  who  lend  us  their  money 
when  we  want  it  upon  no  security  but  our  word  of  honor.     If  we  do  not  pay 

3.44 


ttlBLIC    MEN    ON    SOUND    MONEY. 


them  back  their  money  to  the  strict  letter  of  our  bargain  we  incur   a  shame 
that  can  never  be  removed  from  us. 

We  deprive  New  York  of  an  element  of  strength  which  heretofore  has 
been  wisely  used  and  which  its  people  have  found  profitable,  to  wit,  its  unques- 
tioned credit.  Principle  and  policy  unite  to  commend  the  action  I  urge  upon 
you.  It  is  the  only  way  in  which  the  State  can  in  truth  fulfill  its  contract.  It 
is  the  only  way  in  which  the  State  can  keep  itself  in  a  position  to  go  into  the 
markets  hereafter  as  a  borrower. 

President  Grant,  Second  Inaugural  Address,  March  4,  1873  : 

My  efforts  for  the  future  will  be  directed  to  the  restoration  of  our  currency 
to  a  fixed  value  as  compared  with  the  world's  standard  of  value,  gold,  and,  if 
possible,  to  a  par  with  it. 

President  Grant,  Message  to  Congress,  1874  : 

These  two  causes  have  involved  ua  iu  a  foreign  indebtedness,  contracted 
in  good  faith  by  borrower  and  lender,  which  should  be  paid  in  coin,  and  accord- 
ing to  the  bond  agreed  upon  when  the  debt  was  contracted — gold  or  its  equiva- 
lent. The  good  faith  of  the  Government  cannot  be  violated  toward  creditors 
without  national  disgrace. 

Benjamin  H.  Bristow,  Secretary  of  the  Treasury,  1875 : 

It  is  among  the  first  and  most  important  functions  of  government  to  give 
to  its  people  a  sound  and  stable  currency,  having  a  fixed  relation  to  the  standard 
of  values  in  general  use  among  nations.  The  true  matter  with  which  govern- 
ment has  to  do  is  not  so  much  a  question  of  the  volume  as  of  soundness  and 
stability  of  the  currency.  When  it  has  established  a  currency  of  fixed  and 
stable  value,  having  a  known  relation  to  that  of  other  powers,  and  furnishing  a 
uniform  medium  of  exchange,  the  volume  may  and  should  be  left  to  be  deter- 
mined by  the  wants  of  trade  and  business.  Natural  causes,  aided  by  individual 
effort  and  enterprise,  will  regulate  the  volume  of  currency  far  more  wisely  and 
with  greater  safety  to  business  than  acts  of  Congress  imposing  artificial  limits, 
subject  to  increase  or  diminution  at  every  session. 

Lot  M.  Morrill,  Secretary  of  the  Treasury,  18T6: 

It  is  respectfully  submitted  that  the  coin  payment  to  which  the  faith  of  the 
nation  was  pledged  in  1809  was  gold  and  not  silver,  and  that  any  other  view  of 
it,  whatever  technical  construction  the  language  may  be  susceptible  of,  would 
be  regarded  as  of  doubtful  good  faith  and  its  probable  effect  prejudicial  to  the 
public  credit. 

President  Hayes,  Message  to  Congress,  1877  : 

All  the  bonds  that  have  been  issued  since  February  12,  1873,  when  gold 
became  the  only  unlimited  legal-tender  metallic  currency  of  the  country,  are 
justly  payable  in  gold  coin  or  in  coin  of  equal  value.     During  the  time  of  these 

3.45 


PUBLIC   MEN   ON   SOUND   MONEY. 


issues  the  only  dollar  that  could  be  or  was  received  by  the  Government  in  ex- 
change for  bonds  was  the  gold  dollar.  To  require  the  public  creditors  to  take 
in  repayment  any  dollar  of  less  commercial  value  would  be  regarded  by  them  as 
a  repudiation  of  the  full  obligation  assumed.  The  bonds  issued  prior  to  1873 
were  issued  at  a  time  when  the  gold  dollar  was  the  only  coin  in  circulation  or 
contemplated  either  by  the  Government  or  the  holders  of  the  bonds  as  the  coin  in 
which  they  were  to  be  paid.  It  is  far  better  to  pay  these  bonds  in  that  coin  than 
to  seem  to  take  advantage  of  the  unforeseen  fall  in  silver  bullion  to  pay  in  a 
new  issue  of  silver  coin  thus  made  so  much  less  valuable.  The  power  of  the 
United  States  to  coin  money  and  to  regulate  the  value  thereof  ought  never  to 
be  exercised  for  the  purpose  of  enabling  the  Government  to  pay  its  obligations 
in  a  coin  of  less  value  than  that  contemplated  by  the  parties  when  the  bonds 
were  issued.  Any  attempt  to  pay  the  national  indebtedness  in  a  coinage  of 
less  commercial  value  than  the  money  of  the  world  would  involve  a  violation  of 
the  public  faith  and  work  irreparable  injury  to  the  public  credit. 
President  Garfield,  Inaugural  Address,  March  4,  1881 : 

The  chief  duty  of  the  National  Government  in  connection  with  the  cur- 
rency of  the  country  is  to  coin  money  and  declare  its  value.  Grave  doubts 
have  been  entertained  whether  Congress  is  authorized  by  the  Constitution  to 
make  any  form  of  money  legal  tender.  The  present  issue  of  United  States 
notes  has  been  sustained  by  the  necessities  of  war,  but  such  paper  should  de- 
pend for  its  value  and  currency  upon  its  convenience  in  use  and  its  prompt 
redemption  in  coin  at  the  will  of  the  holder,  and  not  upon  its  compulsory  circu- 
lation.    If  the  holders  demand  it,  the  promise  should  be  kept. 

President  Arthur,  Message  to  Congress,  1884 ; 

I  concur  with  the  Secretary  of  the  Treasury  in  recommending  the  im- 
mediate suspension  of  the  coinage  of  silver  dollars  and  of  the  issuance  of  silver 
certificates.  The  Secretary  avows  his  conviction  that  unless  this  coinage  and 
the  issuance  of  silver  certificates  be  suspended,  silver  is  likely  at  no  distant  day 
to  become  our  sole  metallic  standard.  The  commercial  disturbance  and  the 
impairment  of  national  credit  that  would  be  thus  occasioned  can  scarcely  be 
overestimated. 

President  Cleveland,  Message  to  Congress,  1885; 

When  the  time  comes  that  gold  has  been  withdrawn  from  circulation, 
then  will  be  apparent  the  difference  between  the  real  value  of  the  silver  dollar 
and  a  dollar  in  gold,  and  the  two  coins  will  part  company.  Gold,  still  the 
standard  of  value,  and  necessary  in  our  dealings  with  other  countries,  will  be 
at  a  premium  over  silver;  banks  which  have  substituted  gold  for  the  deposits 
of  their  customers  may  pay  them  with  silver  bought  with  such  gold,  thus  mak- 
ing a  handsome  profit ;  rich  speculators  will  sell  their  hoarded  gold  to  their 
neighbors  who  need  it  to  liquidate  their  foreign  debts,  at  a  ruinous  premium 

8.46 


PUBLIC   MEN    ON   SOUND   MONEY. 


over  silver,  and  the  laboring  men  and  women  of  the  land,  most  defenseless  of 
all,  will  find  that  the  dollar  received  for  the  wage  of  their  toil  has  sadly  shrunk 
in  purchasing  power.  It  rnay  be  said  that  the  latter  result  will  be  but  tempo- 
rary, and  that  ultimately  the  price  of  labor  will  be  adjusted  to  the  change ; 
but  even  if  this  takes  place,  the  wage-worker  cannot  possibly  gain  ;  he  must 
inevitably  lose,  since  the  price  he  is  co;npelled  to  pay  for  his  living  will  not  only 
be  measured  in  a  coin  heavily  depreciated  and  fluctuating  and  uncertain  in  its 
value,  but  this  uncertainty  in  the  value  of  the  purchasing  medium  will  be 
made  the  pretext  for  an  advance  in  prices  beyond  that  justified  by  actual  de- 
preciation. 

President  Harrison,  Message  to  Congress,  1891 ; 

I  am  still  of  the  opinion  that  the  free  coinage  of  silver  under  existing  con- 
ditions would  disastrously  affect  our  business  interests  at  home  and  abroad.  We 
could  not  hope  to  maintain  an  equality  in  the  purchasing  power  of  the  gold  and 
silver  dollar  in  our  own  markets,  and  in  foreign  trade  the  stamp  gives  no  added 
value  to  the  bullion  contained  in  corns.  The  producers  of  the  country,  its 
farmers  and  laborers,  have  .the  highest  interest  that  every  dollar,  paper  or 
coin,  issued  by  the  Government  shall  be  as  good  as  any  other.  If  there  is  one 
less  valuable  than  another,  its  sure  and  constant  errand  will  be  to  pay  them  for 
their  toil  and  for  their  crops.  The  money-lender  will  protect  himself  by  stipu- 
lating for  payment  in  gold,  but  the  laborer  has  never  been  able  to  do  that.  To 
place  business  upon  a  silver  basis  would  mean  a  sudden  and  severe  contraction 
of  the  currency,  by  the  withdrawal  of  gold  and  gold  notes,  and  such  an  unset 
tling  of  all  values  as  would  produce  a  commercial  panic.  I  cannot  believe  that 
a  people  so  strong  and  prosperous  as  ours  will  promote  such  a  policy. 

Daniel  Manning,  Secretary  of  the  Treasury,  1885  : 

A  large  proportion  of  our  workingmen  of  mature  years  have  had  an 
instructive  experience  that  lowering  value  of  any  so-called  dollar  legal  tender 
of  payment  for  their  wages  is  a  lowering  that  is  compensated  to  everybody 
else  before  compensation  reaches  them.  It  is  a  lowering  that  lifts  the  prices  of 
all  commodities  before  it  lifts  the  rates  of  their  wages.  A  cheaper  dollar  for 
workingmen  of  the  United  States  means  a  poorer  dollar.  The  daily  wages  of 
our  workingmen  and  working-women  are  by  far  the  largest,  by  far  the  most 
important,  aggregate  of  wealth  to  be  affected  by  the  degradation  of  the  dollar, 
or  of  any  legal-tender  eqiiivalent  of  the  dollar.  All  other  aggregates  of  wealth, 
the  accumulations  of  capitalists,  which  can  only  obtain  profitable  use  by  being 
turned  over  daily  in  the  wages  of  workmen  and  the  employment  of  the  cap- 
tains of  their  industry,  all  other  aggregates  of  wealth  which  remain  unem- 
ployed in  the  payment  of  wages  of  the  day,  the  month,  the  year,  are  not  to 
be  compared  in  their  sum  to  this  gigantic  sum.  It  is  this  gigantic  sum,  the 
wages  of  labor,  which  is  assailed  by  every  policy  which  would  make  the  dollar 

3.47 


PUBLIC   MEN   ON   SOUND   MONEY. 


of  the  fathers  worth  less  than  its  weight  in  gold.     The   debt  of  the  United 
States,  large  as  it  is,  is  a  wart  beside  that  mountain. 

Daniel  Manning,  Secretary  of  the  Treasury,  1886  : 

But  whether  or  not  a  non-equivalent  of  the  coin  dollar  may  be  made  a  law- 
ful dollar,  and  whether  or  not  post-redemption  issues  and  re-issues  of  such 
promises  can  be  lawfully  made,  after  twenty-one  years  of  peace  have  super- 
seded any  real  or  imagined  exigency  of  war,  certain  it  is  that  every  argument 
of  policy  now  forbids  the  continuance  of  that  legalized  injustice.  Had  it  ever 
been  conferred,  the  Federal  Government  should  be  stripped  of  so  dangerous  a 
power.  No  executive  and  no  legislature  is  fit  to  be  trusted  with  the  control  it 
involves  over  the  earnings  and  the  savings  of  the  people.  No  earthly  sovereign 
or  servant  is  capable  of  a  just  exercise  of  such  authority  to  impair  and  pervert 
the  obligations  of  contracts. 

Hoke  Smith,  late  Secretary  of  the  Interior ;  Speech  at  the  Reform  Club  Sound 
Currency  Dinner,  New  York,  May  16,  1896  : 

If  a  President  and  Congress  were  elected  in  November  committed  to  the 
free  and  unlimited  coinage  of  371 'v^  grains  of  silver  into  dollars,  nearly  six 
months  would  pass  before  they  could  be  inaugurated,  and  six  months  more 
before  the  proposed  legislation  could  become  law.  During  that  time  creditors 
would  seek  to  protect  themselves  against  being  paid  in  dollars  worth  only 
about  13  grains  of  gold,  and  they  would  endeavor  to  make  collections  before 
the  unlimited  coinage  of  depreciated  dollars  began.  The  debtors  would  not 
be  allowed  to  remain  debtors  until  they  could  get  the  advantage  of  paying  off 
what  they  owed  at  fifty  cents  on  the  dollar;  they  would  be  forced  to  immedi- 
ate settlements.  Sheriffs  and  constables  would  call  upon  them  without  delay. 
Depositors  in  banks  would  withdraw  their  money.  The  large  merchants, 
forced  to  settle  their  foreign  indebtedness,  would  insist  upon  the  immediate 
payment  of  debts  due  from  smaller  merchants.  The  smaller  merchants,  in 
turn,  would  be  compelled  to  force  collections  from  their  customers.  The 
great  volume  of  business  conducted  upon  credits  would  cease. 

Manufacturing  enterprises  could  not  afford  to  continue  business  or  make 
contracts  until  the  value  of  the  new  dollar  could  be  settled  by  the  determina- 
tion of  just  what  371 3>^  grains  of  silver  would  prove  to  be  worth.  Manu- 
factories would  close.  Business  houses  would  fail.  Banks  would  be  raided. 
The  unemployed  would  be  numbered  by  millions.  The  farmers  would  find 
few  purchasers  for  their  products.    Want  and  famine  would  pervade  the  land. 

Business  interests,  reaching  from  the  richest  banker  to  the  poorest  paid 
laborer,  require  the  removal  of  all  doubt  about  the  meaning  of  a  dollar.  No 
man  should  be  trusted,  even  with  an  unimportant  nomination,  who  does  not 
recognize  that  the  value  of  a  dollar  is  now  measured  by  23.22  grains  of  gold, 
and  who  is  not  willing  openly  to  declare  his  purpose  to  help  keep  it  there. 

8.48 


STATISTICAL  TABLES. 


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4.01 


STATISTICAL  TABLES. 


Monetary  Systems  and  Approximate  Stocks  of  Money  in  the  Aggre 


Countries. 


United  States  a 

United  Kingdom    

France 

Germany 

Belgium 

Italy 

Switzerland 

Greece  

Spain 

Portugal , 

Roumania 

Servia 

Austria-Hungary 

Netherlands 

Norway 

Sweden 

Denmark 

Russia 

Turkey 

Australia' 

Egypt 

Mexico 

Central  American  States 
South  American  States . 

Japan 

India 

China 

Straits  Settlen;ients 

Canada  

Cuba 

Haiti 

Bulgaria 


Total. 


Monetary 
System. 


Gold*.. 
Gold... 
Gold*.. 
Gold... 
Gold*.. 
Gold*§. 
Gold*.. 
Gold*§. 
Gold*§. 
Gold§.. 
Gold... 
Gold§.. 
Gold§.. 
Gold*. . 
Gold... 
Gold... 
Gold... 
Silver§. 
Gold*.. 
Gold... 
Gold... 
Silver.. 
Silver.. 
Silvers. 
Silver,. 
Silver. . 
Silver. . 
Silver.. 
Gold,.. 
Gold*.. 
Gold*. . 
Gold*.. 


Ratio  be- 
tween gold 

and  full 

legal  tender 

silver. 


ltol5. 


1  to  153^ 

1  to  15>^ 
1  to  151^ 
1  to  151^ 
1  to  15)^ 
1  to  151^ 


1  to  15%' 


1  to  15J^ 
1  to  15% 


1  to  161^ 
1  to  151^ 
1  to  153^ 
1  to  16.18 
ltol5 


1  to  151^ 
1  to  151^ 
1  to  15}^ 


Ratio  be- 
tween gold 
and  limited 
tender  silver 

1  to  14.95 

1  to  14.28 

1  to  14.38 

1  to  13.957 

1  to  14.38 

1  to  14.38 

1  to  14.38 

1  to  14.38 

1  to  14.38 

1  to  14.08 

1  to  13.69 

1  tol5 

1  to  14.88 

1  to  14.88 

1  to  14.88 

1  to  12.90 

1  to  15% 

1  to  14.28 

1  to  15.68 

1  to  14.28 

1  to  14.88 

Population. 


71,390,000 

58,900,000 

38,300,000 

51,200,000 

6,300,000 

30,700,000 

3,000,000 

2,200,000 

17,500,OCO 

5,100,000 

5,800,000 

2,300,000 

43,500,000 

4,700,000 

2,000,000 

4,800,000 

2,300,000 

126,000,000 

22,000,000 

4,700,000 

6,800,000 

12,100,000 

5,600,000 

36,000,000 

41,100,000 

296,000,000 

360,000,000 

3,800,000 

4,800,000 

1,800,000 

1,000,000 

4,300,C00 


Stock  of  gold 


$600,100,000 

6580,000.000 

6850,000,000 

6625,000,000 

655,000,000 

c98,200,000 

Cl4, 900,000 

6500,000 

640,000,000 

638,000,000 

c38,600,000 

c3,000,000 

6140,000,000 

C29,200,000 

67,500,000 

C8,000,000 

Cl4,500,000 

6480,000,000 

650,000,000 

6115,000,000 

6120,000,000 

65,000,000 

6500,000 

640,000,000 

c80,000,000 


20,000,000 

618,000,000 

63,000,000 

6800,000 


$4,074,800,000 


*  In  these  countries  silver  is  a  legal  tender,  but  coined  only  to  a  limited  extent  and  for  gov- 
ernment account,  by  which  means  the  gold  standard  is  maintained.  In  Germany  and  Austria- 
Hungary  some  old  legal -tender  silver  is  still  current. 

§  Actual  standard,  depreciated  paper. 

a  July  1,  1896;  all  other  countries,  January  1,1895. 


4.02 


STATISTICAL  TABLES. 


gate  and  Per  Capita  in  the  Principal  Countries  of  the  World. 


Stock  of  Silver. 


Full  Tender.        ^Mted 


$549,800,000 

6430,000,000 
6105,000,000 

648,000,000 
6c21, 400,000 

610,000,000 

6500,000 

6126,000,000 


680,000,000 
C53,000,000 


630,000,000 


655,000,000 

Cl2,000,000 

630,000,000 

C68,000,000 

6950,000,000 

6750,000,000 

6115,000,000 

61,500,000 
62,100,000 
63,400,000 


$3,440,700,000 


$75,800,000 

6115,000,000 

c57,900,000 

6110,000,000 

66,900,000 

6c20,000,000 

5,000,000 

61,000,000 

640,000,000 

624,800,000 

cl0,600,000 

cl,900,000 

640,000,000 

C3,900,000 

62,000,000 

c4,800,C00 

c5,400,C00 

648,000,000 

c^lO,000,000 

67,000,000 

615,000,000 


Cl6,300,000 


,500,000 


6800,000 
3,400,000 


$632,000,000 


Total. 


$625,600,000 

115,000,000 

487,900,000 

215,000,000 

54,900,000 

41,400,000 

15,000,000 

1,500,000 

166,000,000 

24,800,000 

10,600,000 

1,900,000 

120,000,000 

56,900,000 

2,000,000 

4,800,000 

6,400.000 

48,000,000 

40,000,000 

7,000,000 

15,000,000 

55,000,000 

12,000,000 

30,000,000 

84,300,000 

950,000,000 

.  750,000,000 

115,000,000 

6,500,000 

1,500,000 

2,900,000 

6,800,000 


$4,072,700,000 


Per  Capita. 

Uncovered 

papei. 

Gold. 

Silver. 

Paper. 

Total. 

$383,300,000 

$8.41 

$8.77 

$5.37 

$22.55 

cl  13,400,000 

14.91 

2.96 

2.91 

20.78 

/  32,800,000 

22.19 

13.74 

.85 

35.78 

CG0,4C0,000 

12.21 

4.20 

1.18 

17.59 

c65,4G0,000 

8.73 

8.71 

10.38 

27.82 

Cl72,800,C00 

3.20 

1.35 

5.62 

10.17 

/ 16,400,000 

4.97 

5.00 

5.47 

15.44 

c24,600,000 

.23 

.68 

11.18 

12.09 

c83,700,000 

2.28 

9.49 

4.78 

16.55 

c45,800,000 

7.45 

4.86 

8.98 

21.29 

cll,700,000 

6.65 

1.83 

2.02 

10.50 

/  2,800,000 

1.30 

.83 

1.22 

3.35 

c204,700,000 

3.22 

2.76 

4.70 

10.68 

c34,600,000 

6.21 

12.10 

7.S6 

25.67 

c3,800,0C0 

3.75 

1.00 

1.90 

6.&5 

/ 17,600,000 

1.66 

1.00 

3.66 

6.34 

C5,400,000 

6.30 

2.35 

2.35 

11.00 

C539,000,000 

3.80 

.38 

4.28 

8.46 

2.27 
24.47 
17.65 

1.82 
1.49 
2.20 

4.09 
25.96 
19  85 

62,000,000 

.41 

4.54 

.16 

5.11 

c8,000,000 

.09 

2.14 

1.43 

3.66 

6550,000,000 

1.11 

.83 

15.28 

17.22 

83,000,000 

1.95 

2.05 

2.02 

6.02 

637,000,000 

3.21 
2.08 

.12 

3.33 
2.08 

3  26 

3  26 

40,000,000 

4.17 

1.35 

8.32 

13.84 

10.00 
3.00 

.83 
2.90 

4.20 

10.63 
10.10 

c4,200,000 

.18 

1.58 

1.78 

$2,542,400,000 

6  Estimate,  Bureau  of  the  Mint. 

c  Information  furnislied  through  United  States  representatives. 

d  Haupt. 

e  Except  "Venezuela  and  Chili. 

^Bulletin  de  Statistique. 


4.03 


STATISTICAL  TABLES. 


Products  of  gold  and  silver  from  mines  in  the  United  States,  1873-1895 

The  silver  product  is  given  at  its  commercial  value,  reckoned  at  the  average  market 
of  silver  each  year,  as  well  as  its  coining  value  in  United  States  dollars. 


Calendar  Year. 


1873 

1874 

1875 

1876 

1877.... 

1878 

187D  ..  .. 

1880 

1881 

1882 

1883 

1884 

1885 

1886 

1887 

1888  ..  .. 

1889 

1890 

1891 

1892 

1893 

1894 

1895 

Total 


Gold. 


Pine  ounces. 


1,741,500 
1,620,563 
1,615.725 
1,930,162 
2,268,788 
2,476,800 
1,881,787 
1,741,500 
1,678,612 
1,572,187 
1,451,250 
1,480,950 
1,538,325 
1,693,125 
1,. 596,375 
1,604,841 
1,587,000 
1,588,880 
1,604,840 
1,596,375 
1,739,323 
1,910,813 
2,254,760 


Value. 


$36,000,OCO 
33,500,000 
33,400,000 
39,900,000 
46,900,000 
51,200,000 
38,900,000 
36,000,000 
34,700,000 
32,500,000 
30,000,000 
30,800,000 
31,800,000 
35,000,000 
33,000,000 
33,175,000 
32,800,000 
32,845,000 
33,175,000 
33,000,000 
35,955,000 
39,500,000 
46,610,000 


Silver. 


Fine  ounces. 


27,650,000 
28,849,000 
24,518,000 
80,009,0[J0 
30,783,000 
34,960,000 
31,550,000 
30,320,000 
33,230,000 
36,200,000 
a5,730,000 
37,800,000 
30,910,000 
39,440,000 
41,200,000 
45,780,000 
50,000,000 
54,500,000 
58,330,000 
63,500,000 
60,000,000 
49,500,000 
55,727,000 


Commercial 
value. 


40,183,481      $830,660,000        939,576,003      $943,083,000        $1,214,751,000 


$35,690,000 
36,869,000 
30,549,000 
34,690,000 
36,970,000 
4\270,000 
35,430,000 
34,720,000 
37,850,000 
41,120,000 
39,660,000 
42,070,000 
42,500,000 
39,230,000 
40,410,000 
43,020,000 
46,750,000 
57,225,000 
57,630,000 
55,563,000 
46,800,000 
31,122,000 
36,445,000 


Coining  value. 


$35,750,000 
37,300,000 
31,700,000 
38,800,000 
39,800,000 
45,200,000 
40,800,000 
39,200,000 
43,000,000 
46,800,000 
40,200,000 
48,800,000 
51,600,000 
51,000,000 
53,350,000 
59,195,000 
64,646,000 
70,465,000 
75,417,000 
82,101,000 
77,576,000 
64,000,003 
72,051,000 


Average  Yearly  Wages  in  the  U.  8.  in  Manufacturing  Industries. 
As  shown  by  Census  Reports. 


Year. 

Population 

Employees 

Total  wages. 

Equivalent 

total  wages  in 

gold. 

Average  An- 
nual wages  in 

Wages  in- 
creased since 
previous 
census. 

1860 
1870 
1880 
1890 

31,443,321 
38,558,371 
50,155,733 
62,831,900 

1,311,246 
2,053,996 
2,732,595 
4,712,622 

$378,878,986 
775,584,343 
947,953,795 

2,283,216,529 

$378,878,966 
674,421,168 
947,953,795 

2,283,216,529 

$228 
328 
347 
484 

14    per  cent. 
5X       " 
39 

4.04 


STATISTICAL  TABLES. 


T^nT,"^^^' 


Statement  of  the  Coin  and  Paper  Circulation  of  tlie  United  States  on  June  30, 
from  I860  to  1896,  inclusive. 

[Prepared  by  Loans  and  Currency  Division,  Treasury  Department.] 


Year. 


1860. 
1831. 
1862. 
18ti3. 
1864. 
1865. 
18t)6 
1867. 


1870. 
1871. 
18?2. 
1873. 
1874. 
1875. 
1876. 
1877. 
1878. 
1879. 
1880. 
1881. 
1882. 
1883. 


1885. 
1886. 
1887. 


1890. 
1891. 


1894. 


Coin  in  Uni- 
ted States, 
including 
Bullion 

in  Treasury. 


S235,000,000 

250,000,000 

25,000,000 

25,000,000 

25,000,000 

25,000,000 

25,000,000 

25,000,000 

25,000,000 

25,000,000 

25,000,000 

25,000,000 

25,0lO,000 

25,000,000 

25,000,000 

25,000,000 

52,418,734 

65,837,506 

102,047,907 

357,268,178 

494,363,884 

647,868,682 

703,974,839 

769,740,048 

801,068,939 

872,175,823 

903,027,304 

1,007,513,901 

1,092,391,690 

1,100,612,484 

1,152,471,938 

1,163,185,054 

1,232,854,331  i 

1,213,413,584! 

1,251,543,158! 

1,260,987,506 

1,225,618,792 


Paper 

Money  in 

United 

States. 


$207,102,477 
202,005,767 
333,4^2,079 
649,867,283 
680,588,067 
745,129,755 
729,327,254 
703,200,612 
691,553,578 
690,351,180 
697,868,461 
716,812,174 
737,721,565 
749,445,010 
781,024,781 
773,273,509 
738,264,550 
697,216,341 
6m9,205,669 
694,253,363 


Total 
Money. 


Coin 

Bullion 
and  Paper 

Money 

in  Trea's- 

ury. 


S442, 102,4 
452,005,767 
358,052,079 
674,867,283 
705,588,067 
770,129,755 
754,327,254 
728,200,612 
716,553,578 
715,351,180 
722,868,461 
741,812,174 
762,721,565 
774,445,610 
806,024,781 
798,273,509 
790,683,284 
763,053,847 
791,253,57' 

1,051,521,541 


711,565,313  1,205,929,19 

758,673,141  1,406,541,823 

776,550,88011,480,531,719 

873,749,768  1,643,489,816 

904,385,250,1,705,454,189 

945,482,513  1,817,658,336 

905,-532,390  1,808,559,694 

892,928.771  {1,900,442,67 

970,564;259' 2,062,955,949 

974,738,277(2,075,350,711 

991,754,5212,144,226,159 

1,03  .',039,021  2,195,224,075 

1,139,745,170|2,372,599,501 

1,109,988,808  2,323,402,-392 

1, 168,891, 623i2,420,434,781 

1 , 1 37,619,914  i  2,398,607,420 

1,120,012,536  2,345,631,328 


$6,095,225, 

3,600,000 

23,754,3351 

79,473,245; 

35,946,589; 

55,426,7601 

80,839,0101 

66,208,5431 

36,449,9171 

50,898,289 

47,655,6671 

2.5,923,1691 

24,412,0161 

22,563,801! 

29,911,750 

44,171,.562l 

63,073,896 

40,738,964 

62,120,942 

232,889,748' 

232,546,909 

292,303,704 

306,241,300 

413,184,120 

461,528,220 

525,039,721 

555,859,160 

582,903,529 

690,785,079^ 

694,989,062 

714.974,889 

697,783.368 

771,252,314 

726,701,1471 

759,626,073 

796,638,947 

839,000,302 


Total 

Money 

in 

Circulation. 


$435,407,252 

448,405,767 

334,697,744 

595,394,038 

669,641,478 

714,702,995 

673,488,244 

661,992,069 

680,103,661 

664,452,891 

675,212,794 

715,889,005 

738,3^9,549 

751,881,809 

776,083,031 

754,101,947 

727,609,388 

722,314,883 

729,132,634 

818,631,793 

973,332,228 

1,114,238,119 

1,174,390.419: 

1,230,305,698] 

1,243,92.5,9691 

1,292.568,615! 

1,2.'^2,700,525 

1,317,539.143 

1,372,170,870! 

1,380,361,6491 

1,429,251,2701 

1,497,440.707 

1,601,347,187 

1,586,701,245 

1,660,808,708 

1,601,908,473 

1,506,631,026 


Popula- 
tion. 


I  Circula- 
tion 
per 
Capita. 


31,443,321 
32,064,000 
32,704,000! 
33.365,000! 
34,046.000 
34,748;000 
35,469,000 
36,211,000 
36,973,000 
37,756,000 
38,558,371 
39,555,000 
40,596,000 
41,677,000 
42,796,000 
43,951,000 
45,137,000 
46,353,000 
47,598.000 
48,866,000 
50,155,783 
51,316,000 
52,495,000 
53,693,000 
54.911,000 
56,118,000 
57,404,000 
58,680,000 
59,974,000 
61,289,000 
02,022,2.^0 
63,975,000 
65  .580,000 
66,946,000! 
68,397,000! 
69,878,000! 
71,390,000, 


$13.85 
13.98 
10.23 
17.84 
19.67 
20.57 
18.99 
18.28 
18.39 
17  60 
17.60 
18.10 
18.19 
18.04 
18.13 
17.16 
16.12 
15.58 
15.32 
16.75 
19.41 
21.71 
22.37 
22.91 
22.65 
23.03 
21.82 
22.45 
22.88 
22.52 
22.82 
23.41 
24.44 
23. a5 
24.28 
22.93 
21.10 


Note  1.— Specie  payments  were  suspended  from  January  1,  1862,  to  January  1, 1879.  Dur- 
ing the  greater  part  of  that  period  gold  and  silver  coins  were  not  in  circulation  except  on  the 
Pacific  coast,  where,  it  is  estimated,  the  specie  circulation  was  generally  about  ?25.000,000. 
This  estimated  amount  is  the  only  coin  included  in  the  above  statement  from  1802  to  1875, 
inclusive. 

Note  2.— In  1876  subsidiary  silver  again  came  into  use,  and  is  included  in  this  statement, 
beginning  with  that  year. 

Note  3.— The  coinage  of  standard  silver  dollars  began  in  1878  under  the  act  of  February 
28, 18 1 8. 

Note  4.— Specie  payments  were  resumed  January  1,  1879,  and  all  gold  and  silver  coins,  as 
well  as  gold  and  silver  bullion  in  the  Treasury,  are  included  in  this  statement  from  and  after 
that  date. 


4.05 


STATISTICAL  TABLES. 


Highest,  lowest  and  average  price  of  silver  bullion  and  bullion  value  of  a  United 
States  silver  dollar,  measured  by  the  market  price  of  silver^  and  the  quantity 
of  silver  purchasable  with  a  dollar  at  average  London  price  of  silver,  1873-95. 


Calendar 
Year. 


1873 

1874 

1875 

1876 

1877 

1878 

1879 

1880 

1881    

1882.... 

1883 

im 

1885 

1886 

1887 

1888 

1889 

1890 

1891 

1892 

1893 

1894 , 

1895 

1896  (6  months) 


Price  of  Silver  Bullion, 


Lowest. 


57| 

57i 

55^ 

46| 

53i 

49^ 

48g 

511 

501 

50 

50 


42 

43i 

41| 

42 

431 

m 

37i 

m 

27 
27t^ 
30i 


Highest 


mi 
m 

571 
58^ 
58i 
55i 
532 
52| 
52| 
52i 

511 
50 
47 

^h 

441 
54| 
481 
43| 
38| 
3l| 

31f 

31  ii 


lvalue  of  a 
Average  JfiJ^^  ounce 
at  average 
quotation 


59i 

58r\ 

E6i 

523 

U\i 

52,«s 

51i 

52i 

5111 

5111 

501 

50| 

48x% 

451 

44| 

421 

411i 

47f 

45118 

39| 

35,% 

28| 

291i 


1.298 

1.273 

1.246 

1.156 

1.201 

1.152 

1.123 

1.145 

1.138 

1.136 

1.110 

1.113 

1.0645 
.9946 
.97823 
.93897 
.93519 

1 


.87106 
.78031 
.63479 
.68406 
.68158 


Bullion  valwe  of  a  silver 
dollar. 


Highest 


$1,016 

1.003 

.977 

.991 


.911 


.887 
.868 
.871 
.847 
.797 
.799 
.755 
.752 
.926 
.827 
.742 
.655 
.538 
.532 


Lowest. 


Average 


$0,981 
.970 
.941 


.875 
.862 
.847 
.847 
.839 
.794 
.712 
.733 
.706 
.746 
.740 
.738 
.642 
.513 
.457 
.461 
.517 


$1,004 


.964 


.881 
.878 


.769 
.758 
.727 
.724 
.810 
.764 
.674 
.604 
.491 
.505 


Grains  of  pure 
silver  at  aver- 
age price  pur- 
chasable with  a 
United  States 
silver  dollar.* 


375.76 
385.11 
415.27 
398.62 
419.66 
427.70 
419.49 
421.87 
422.83 
472.69 
431.18 
451.09 
482.77 
489.78 
510.66 
512.93 
4.58.83 
485.76 
550.79 
615.10 
756.04 
733.87 
704.03 


371.25  grains  of  pure  silver  are  contained  in  a  silver  dollar. 
4.06 


STATISTICAL    TABLES. 


Commercial  ratio  of  silcer  and  gold  each  year  1687-1895. 

[Note— From  1687  to  1832  the  ratios  are  taken  from  Dr.  A.  Soetbeer  ;  from  1833  to  1878 
from  Pixley  and  AbelPs  tables,  and  from  1879  to  1894  from  daily  cablegrams  from  London  to 
the  Bureau  of  the  Mint.] 


Year. 

Ratio. 

Year. 

Ratio. 

Year. 

Ratio. 

Year. 

Ratio.! 

! 

Year. 

Ratio. 

Year. 

Ratio. 

1687... 

14.94 

1723.. 

15.20 

1759.. 

14.15 

1795.. 

15.55 

1831.. 

15.72 

1867... 

15.57 

1688... 

14.94 

1724.. 

15.11 

1760.. 

14.14 

1796.. 

15.65  : 

1832.. 

15.73 

1868... 

15.59 

1689... 

15.02 

1725.. 

15.11 

1761.. 

14.54 

1797.. 

15.41  : 

1833.. 

15.93 

1869... 

15.60 

1690... 

15.02 

1726.. 

15.15 

1762.. 

15.27 

1798.. 

15.59 

1834.. 

15.73 

1870.. 

15.57 

1691... 

14.98 

17^.. 

15.24 

1763.. 

14.99 

1799.. 

15.74  1 

1835.. 

15.80 

1871... 

15.57 

1692... 

14.92 

1728.. 

15.11 

1764. 

14.70 

1800.. 

15.68 

1836.. 

15.72 

1872... 

15.63 

1693. . . 

14.83 

1729. 

14.92 

1765.. 

14.83 

1801.. 

15.46 

1837 •• 

15.83 

1873... 

15.92 

1694... 

14.87 

1730... 

14.81 

1766.. 

14.80 

1802.. 

15.26 

1838.. 

15.85 

1874... 

16.17 

1695... 

15.02 

1731.. 

14.94 

1767.. 

14.85 

1803.. 

15.41 

18:39. . 

15.62 

1875... 

16.59 

1696. . . 

15.00 

1732.. 

15.09 

1768.. 

14.80 

1804.. 

15.41 

1840.. 

15.62 

1876... 

17.88 

1697... 

15.20 

1733.. 

15.18 

1769.. 

14.72 

1805.. 

15.79 

1841.. 

15.70 

1877... 

17.22 

1698... 

15.07 

1734.. 

15.39 

1770.. 

14.62 

1806.. 

15.52 

1842.. 

15.87 

1878... 

17.94 

1699. . . 

14.94 

1735.. 

15.41 

1771.. 

14.66 

1807.. 

15.43 

1843. 

15.93 

1879... 

18. 4P 

1700... 

14.81 

1736.. 

15.18 

1772.. 

14.52 

1808.. 

16.08 

1844.. 

15.85 

1880... 

18.05 

1701... 

15.07 

1737.. 

15.02 

1773.. 

14.62 

1809.. 

15.96 

1845.. 

15.92 

1881... 

18.16 

1702... 

15.52 

1738.. 

14.91 

1774.. 

14.62 

1810.. 

15.77 

1846.. 

15.90 

1882... 

18.19 

1703... 

15.17 

1739.. 

14.91 

1775.. 

14.72 

1811.. 

15.53 

1847.. 

15.80 

1883... 

18.64 

1704... 

15.22 

1740.. 

14.94 

1776.. 

14.55 

1812.. 

16.11 

1848.. 

15.85 

1884... 

18.57 

1705... 

15.11 

1741.. 

14.92 

1777.. 

14.54 

1813.. 

16.25 

1849.. 

15.78 

1885... 

19.41 

1706... 

15.27 

1742.. 

14.85 

1778.. 

14.68 

1814.. 

15.04 

1830.. 

15.70 

1886... 

20.78 

1707... 

15.44 

1743.. 

14.85 

1779.. 

14.80 

1815.. 

15.26 

1851.. 

15.46 

1887... 

?1.13 

1708... 

15.41 

1744.. 

14.87 

1780.. 

14.72 

1816.. 

15.28 

1852.. 

15.59 

1888... 

21.99 

1709... 

15.31 

1745.. 

14.98 

1781.. 

14.78 

1817.. 

15.11 

1853.. 

15.33 

1889.. 

22.10 

1710... 

15.22 

1746.. 

15.13 

1782.. 

14.42 

1818.. 

15.35 

1854.. 

15.33 

1890... 

19.76 

1711... 

15.29 

1747.. 

15.26 

1783.. 

14.48 

1819.. 

15.33 

1855.. 

15.38 

1891... 

20.92 

1712... 

15.31 

1748.. 

15.11 

1784.. 

14.70 

1820  . 

15.62 

1856.. 

15.38 

1892... 

23.72 

ins... 

15.24 

1749.. 

14.80 

1785.. 

14.92 

1821.. 

15.95 

1857.. 

15.27 

1893... 

26.49 

1714. . . 

15.13 

1750.. 

14.55 

1786.. 

14.96 

1822.. 

15.80 

1858.. 

15.38 

1894... 

32.56 

1715... 

15.11 

1751.. 

14.39 

1787.. 

14.92 

1823.. 

15.84 

1859.. 

15.19 

1895... 

31.60 

1716... 

15.09 

1752.. 

14.. 54 

1788.. 

14.65 

1824. 

15.82 

I860.. 

15.29 

1896  (6 

1717... 

15.13 

1753.. 

14.54 

1789.. 

14.75 

1625. 

15.70 

1861.. 

15.50 

months] 

30.32 

1718... 

15.11 

1754.. 

14.48 

1790.. 

15.04 

1826.. 

15.76 

1862.. 

15.35 

1719... 

15.09 

1755.. 

14.68 

1791.. 

15.05 

1827.. 

15.74 

1863.. 

15.37 

1720... 

15.04 

1756.. 

.14.94 

1792.. 

15.17 

1828  . 

15.78 

1864  . 

15.37 

1721... 

1  15.05 

1757.. 

14.87 

1793.. 

15.00 

1829.. 

15.78 

1865.. 

15.44 

1722... 

i  15.17 

1758.. 

14.85 

1794.. 

15.37 

1830.. 

15.82 

i 

1866.. 

15.43 

4.0^ 


STATISTICAL  TABLES. 


Comparative  Statement  of  the  Exchanges  of  certain  Clearing-houses  of  the 
United  States  for  Four  Tears. 


Clearing-house    at— 

Exchanges  for  years  ending  September  30— 

1895. 

1894. 

1893. 

1892. 

:Xewyork 

$28,264,379,126 

4,629,303,920 

4,541,435,624 

3,395,864,.543 

1,218,425,682 

671,892,105 

685,004.866 

711,773,043 

653,228,500 

507,805,333 

451,679,488 

337,201,924 

338,313,355 

309,894,324 

4,395,380,095 

$24,230,145,368 

4,095,997,060 

4,263,560,459 

2,962,542,206 

1,106,770,443 

647.848,503 

66:!,214,30i 

630,268,350 

630,364,300 

464,394,146 

445,671,K0 

298,085,090 

282,755,354 

308,993,881 

4,007,886,111 

$34,421,379,870 

4,864,779,750 

4,970,913,387 

3,656,677,140 

1,188,378,457 

752,949,766 

737,568,241 

711,547,291 

679,051,0^  0 

507,454,919 

523,996,645 

377,785,380 

353,558,369 

3.56,361,823 

4,778,280,417 

$36,279,905,236 

4,901,096,976 

4,959,861,142 

3,671,149,407 

1,211,370,719 

833,617,128 

772,435,1.33 

743  635,356 

728,711,350 

494.906,132 

488,931,005 

427,287,201 

347,737,532 

368,698,812 

4,654,229,671 

Boston 

Chicago. 

Philadelphia 

St.  Louis 

San  Francisco 

Baltimore 

Pittsburgh 

Cincinnati .   . . 

Kansas  City 

New  Orleans 

Minneapolis 

Detroit  . 

Other  cities  . . . 

Total 

$51,111,591,928 

$45,028,496,746 

$58,880,68ai455 

$60,883,572,438 

Transactions  of  the  New  York  Clearing  House  for  Thirty-dx  Years. 

Year. 

No.  of 
Banks. 

Capital. 

Clearings. 

Balances  Paid 
iu  Money. 

Average 

Daily 

Clearings. 

Average 
Daily  Bal- 
ances Paid 
in  Money. 

Bal- 
ances to 
Clear- 
ings. 

1860 

50 

$69,907,435 

$7,231,143,057 

$380,693,438 

$28,401,757 

11,232,018 

5.3^ 

1861 

50 

68,900,605 

5,915,742,758 

3o3,383,944 

19,269,520 

1,151,088 

6.0 

1862 

50 

68,375,820 

6,871,443,591 

415,530,331 

22,237,682 

1,344,758 

6.0 

1863 

50 

68,972,508 

14,867,597,849 

677,626,483 

48,428,657 

2,207,252 

4.6 

1864 

49 

68,586,763 

24,097,196,656 

885,719,205 

77,984,455 

2,866,405 

3.7 

1865 

55 

80,363,013 

26,032,381,342 

1,035,765,108 

84,796,040 

3,373,828 

4.0 

1866 

58 

82,370,200 

28,717,14fi,9i4 

1,066,135,106 

98,541,195 

3,472,753 

3.7 

1867 

58 

81,770,200 

28,675,159,472 

1,144,963,4.51 

93,101,167 

3,717,414 

4.0 

186S 

59 

82,270,200 

28,484,288,637 

1,125,455,237 

92.182,164 

3,642,2.50 

4.0 

1869 

59 

82,720,200 

37,407,028,987 

1,120,318,308 

121,451,393 

3.637,397 

3  0 

1870 

61 

83,620,20) 

27,804,539,406 

1,036,484,8-^2 

90,274,479 

3,365,210 

3.7 

1871 

02 

84,420,200 

29,300,986,682 

1,209,721,029 

95,133,074 

3.927,666 

4  1 

1872 

61 

84,420,200 

33,844,369,568 

1,428,582,707 

109,884,317 

4,636,632 

4.2 

1873 

59 

83,370,200 

35,461,052,826 

1,474,508,025 

115,885,794 

4,818,654 

4.1 

1874 

59 

81,635,200 

22,855,927,636 

1,286,753,176 

74,692,574 

4,205,076 

5.7 

1875 

58 

80,435,200 

25,061,237,903 

1,408,608,777 

81,899,470 

4,603,297 

5.6 

1876 

59 

81,731,200 

21,597,274.247 

1,295,042,029 

70,349,428 

4,218,378 

5.9 

1877 

58 

71,085,200 

23,289,243,701 

1,373,996,302 

76,358,176 

4.504,906 

5.9 

1878 

57 

63,611,500 

22,508,438,442 

1,307,843,857 

73.555,988 

4,274,000 

5.8 

1879 

59 

60,800,200 

25,178,770,691 

1,400,111,063 

82,015,540 

4,560,622 

5.6 

1880 

57 

60,475,200 

37,182,128,621 

1,516,.538,631 

121,510,224 

4,956,009 

4.1 

1881 

00 

61,162,700 

48,565,818,212 

1,776,018,162 

159,232,191 

5,823,010 

3.5 

1882.... 

61 

60,962,700 

46,552,846,161 

1,59.5,000,245 

151,637,935 

5,195,440 

3.4 

1883 

63 

61,162,700 

40,293,165.258 

1,568,983,196 

132,543,307 

5,161,129 

3.9 

1884 

Gl 

60,412,700 

34,092,037,338 

1,524,930,994 

111,048,982 

4,967,202 

4.5 

1885 

64 

58,612,700 

25,250,791,440 

1,295,355,252 

82,789,480 

4,247,069 

5.1 

1886 

63 

59,312,700 

33,374,682,216 

1,519,565,385 

109.067,589 

4,965,900 

4.5 

1887 

64 

60,862,700 

34,872,848,786 

1,569.626,325 

114,337,209 

5,146,316 

4.5 

1888.     .. 

03 

60,762,700 

30,863,686,609 

1,570,198,528 

101,192,415 

5,148,192 

5.1 

1889 

63 

60,762,700 

34,796,465,529 

1,757,637,473 

1 14,839,820 

5,800,784 

5.0 

189C.   .. 

64 

60,812.700 

37,660,686,572 

1,753,040,145 

123,074,139 

5,728,889 

4.7 

1891 

63 

60,772,700 

34,053,698,770 

1,584,635,500 

111,651,471 

5,195,526 

4.6 

1892 

61 

60,422,700 

36,279,905,236 

1,861,500,575 

118,561,782 

6,0,S3,335 

5  1 

1893 

64 

60,922,700 

34,431,380,870 

1,698,207,176 

113,978,082 

5.616,580 

4.9 

1894 

65 

61,622,700 

24,230,145,368 

1,585,241,634 

79,704,426 

5,214,611 

6.5 

1895 

66 

62,622,700 

28,264,379,126 

1,896,574,349 

92,670,095 

6,218,276 

6.7 

4.08 


STATISTICAL  TABLES. 


Coinage  of  the  U.  8.  Mints  from  Organization,  1793,  to  June  30,  1896. 


Denomination. 


Gold. 

Double  Eagles 

Eagles 

Half  Eagles 

Three-dollar  pieces,  1853-1890 

Quarter  Eagles 

Dollars,  1849-1890 

Total  gold 

Silver. 

Dollars 

Trade  dollars    

Half  dollars 

Columbian  half  dollars 

Quarter  dollars 

Columbian  quarter  dollars 

Twenty-cent  pieces,  1875-1878 

Dimes 

Half  dimes,  1792-1873 

Three-cent  pieces,  1851-1873 

Total  silver 

Total  gold  and  silver 

Minor  coinage 

Grand  total 


Pieces. 


65J,884,661 
26,653,827 
44,126,207 
539,792 
11,484.406 
19,499,337 


166,188,230 


488,821,279 

35,965,924 

265,324,616 

5,002,105 

204,664,667 

40,023 

1.355,000 

289,043,005 

97,604,.S88 

42,736,240 


1,380,557,247 


1.546,745,477 
1,535,261,002 


3,082,006,479 


Value. 


$1,277,693,220  00 

266,538,270  00 

220,631,035  00 

1,619,376  00 

28,711,015  00 

19,499,337  00 


$1,814,692,253  00 


$438,821,279  00 

35,965,924  00 

132,662,308  00 

2,501,052  50 

51,166,166  75 

10,005  75 

271,000  oa 

28,904,300  50 

4,880,219  40 

1,282,087  20 


$696,464,343  10 


$2,511,156,596  10 
27,830,048  67 


$2,538,986,644  77 


Railroad  Freight  Earnings  and  Bates  per  Ton,  1873-95. 
Compiled  from  Henry  W.  Poor's  Figures. 


Year. 


1878. 
1874. 
1875 
1876 
1877 
1878 
1879 
1880 
1881. 
1882 
1883 
1884 
1885 
1886 
1887 
1888, 
1889 
1890 
1891 
1892 
1893 
1894 
1895 


Earnings  from 

Tons  Freight 

Average 
Rate  Per 

Freight. 

Moved. 

Ton  Per 

Mile. 

$389,025,508 

188,000,000 

2.210 

379,466,935 

190,000,000 

2.040 

363,960,234 

190,000,000 

1.810 

361,137,376 

210,000,000 

1.585 

347,704,548 

210,000,000 

1.524 

365,496,061 

231,700,000 

1.401 

386,676,108 

280,000,000 

1.201 

467,748,928 

326,000,000 

1.M8 

551,968,477 

336,000,010 

1.264 

485,778,341 

860,490,375 

1.236 

559,509,831 

400,453.439 

1.224 

502,869,910 

399,074,749 

1.125 

509,690,992 

437,040,099 

1.036 

5.^0,359,054 

482,245,254 

1.042 

636,666,223 

552,074,752 

1.034 

639,200,723 

590,857,353 

0.977 

665,962,631 

619,165,630 

C.970 

734,821,733 

691,344,437 

0.927 

754,185,910 

704,398,609 

0.929 

794,526,500 

730,605,011 

0.941 

808,494,668 

757,464,480 

0.893 

70^,477,409 

674,714,747 

0.864 

743,784,751 

763,799,883 

0.839 

4.09 


STATISTICAL  TABLES. 

r 

Cro'p  and  Yearly  Prices  of  Cotton,  1872-95. 

Annual  Crop  of  Cotton        Year' 
Year.  in  Bales. 

1873 2,974,351 

1873 3,930,508 

1874 4,170,388 

1875 3,827,845 

1876 4,632,313 

1877 4,474,069 

1878  4,773,865 

1879 5,074,155 

1880 5,761,252 

1881 6,605,750 

1882 5,456,048 

1883 6,949,756 

1884.....' 5,513,200 

1885 5,706,165 

1886 6,575,691 

1887 6,505,087 

1888 7,046,833 

1889 6,938,290 

1890 7,311,322 

1891 ,  8,652,597 

1892 9,035,379 

1893 6,700,365 

1894 7,549,817 

1895 9,901,251 


B  Price,  N.  Y. 
in  Cents. 

22.19 

20.14 

17.95 

15.46 

12.98 

11.82 

11.22 

10.84 

11.51 

12.03 

11.56 

11.88 

10.88 

10.45 

9.28 
10.21 
10.03 
10.65 
11.07 

8.60 

7.71 

8.56 

6.94 

7.44 


•Gold  Values  for  Wheat  per  Bushel,  Minnesota,  New  Tork  and  London,  1862-94. 


Minn. 

New  York. 

London. 

Differences. 

Year. 

Minn,  and 
New  York. 

Minn,  and 
London. 

1863-66 

.%.5 
65.8 
73.1 
72.7 
92.2 
64.2 
73.4 
6.2.1 

115.0 
138.6 
134.1 
110.5 
132.4 
92.4 
95.8 
88.5 

175*.  6 
176.3 
149.2 
149.6 
113.5 
106.1 

58.5 
73.3 
61.1 
37.8 
40.2 
38.2 
21.9 
21.4 

1867-70             

110,3 
103.2 
76  5 

1871-74 

1875-78 

1879-82 

57.4 

1883-86 

48.3 

1887-90  

38.7 

1891-94 

4.10 


STATISTICAL  TABLES. 


Average  Farm  Prices  Per  Ton  in  Gold  in  Illinois^  1862-94. 
Compiled  by  L.  G.  Powers  of  Minnesota. 


Chops. 


Corn 

Oats 

Wheat ,. 

Barley  

Buckwheat 

Kye 

Potatoes 

Hay 

Tobacco 

Corn,  Oats  and  Wheat  (1) 
Corn,  Oats  and  Wheat  (2) 

All  Crops  (1) 

All  Crops  (2) 


1862 

1867 

1871 

1875 

to 

to 

to 

to 

1866 

1870 

1874 

1878 

$10.57 

$13.08 

$10.97 

$9.84 

16.42 

18.35 

16.33 

13.62 

2Q.17 

30.44 

32.49 

28.34 

34.22 

29.60 

28.16 

24.74 

20.95 

26.05 

29.01 

25.76 

16.81 

20.62 

18.82 

17.25 

14.89 

17.39 

23.04 

13.51 

7.16 

7.55 

8.70 

6.19 

167.24 

134.04 

156.63 

96.08 

14.26 

16.38 

14.26 

12.05 

13.69 

15.97 

14.40 

12.66 

12.45 

13.83 

13.17 

10.60 

11.98 

13.75 

13.13 

10.98 

1879 
to 

1882 


to 


I 

$14.55  $11.43 
20.68,  15.63 
33.10  24.59 
29.41|  22.39 
31. 65 I  25.99 
23.68  17.98 
19.8?!  12.86 
9.54     6.81 

134.25  147.60 
18.21,  13.28 
17.72i  13.66 
16.25  11.31 
15.59j  11.83 


1887 
to 


$11.60 
15.90 
26".  18 
24.77 
24.87 
18.65 
17.11 
8.70 

168.14 
14.06 
14.01 
12.65 
12.72 


1891 

1862 

to 

to 

1894 

1894 

$12.91 

$11.82 

17.92 

16  77 

20.96 

29.55 

18.25 

25.72 

29.58 

25.54 

15.04 

19. (M 

23.02 

17.39 

7.62 

7.82 

143.68 

145.65 

14.83 

14.59 

14.61 

14.59 

13.31 

12.88 

13.19 

12.88 

Per- 
cent- 
ages. 


50.36 
9.81 
8.49 
0.27 
0.04 
0.63 
2.37 

27.99 
0.03 


No.  1.    General  averages  of  all.  No.  2.    Averaged  on  relative  importance. 

Farm  Prices  in  Indiana,  1862-95. 
Compiled  by  Lncias  B.  Swift  of  Indianapolis. 


Corn,  per  bnsbel. . . . 

Oats,  per  bushel 

Wheat,  per  bushel . . 

Rye,  per  bushel 

Potatoes,  per  bushel 
Hay,  per  ton 


1873-1877. 


35.6 
29.6 
95 

52.8 

53 

$9.31 


1878-1882. 


1883-1887. 


41.8 
31.6 
102.6 
70.4 
60.6 
$9.47 


37 

28.8 

79 

57.6 

50.8 

$8.21 


35.2 

87.2 
68 
.59.4 
$9.54 


Prices  of  Farm  Implements  in  Bushels  of  Grain, 

1873  and  1889. 

Implembnts. 

Bush.  ^ 

5^HEAT. 

Bush. 

Corn. 

Bush. 

Oats. 

1873. 

1889. 

1873. 

1889. 

1873. 

1889. 

One-horse  steel  plow  (wood  beam') 

6.4 

4.9 

17.6 

19.6 

14.7 

6.8 

83.3 

11.7 

44.1 

277.7 

11.2 

6.3 

2.9 

15.7 

10.8 

17.6 

18.1 

3.8 
2.7 

13.7 

10.2 
8.9 
4.7 

61.6 
5.1 

34.2 
184.9 
8.2 
4.7 
2.4 

10.2 
6.1 

13.0 

13.7 

19.1 

14.7 

52.9 

58.8 

44.1 

20.5 

250.0 

35.2 

132.3 

769.2 

33.8 

19.1 

8.8 

47.0 

32.3 

52.9 

54.4 

8.5 

62 

31.2 

23.4 

20.3 

10.9 

140.6 

11.7 

78.1 

421  8 

18.7 

10.9 

6.2 

23.4 

14.0 

29.6 

31.2 

27.0 
20.8 
75.0 
83.3 
62.5 
29.1 
354.1 
50.0 
187.5 
857.1 
47.9 
27.0 
12.5 
68.6 
45.8 
75.0 
27.0 

11.5 

One-horse  iron  plow  (wood  beam)        

8  3 

Two-horse  side-hill,  or  reversible  plow 

One  potato  digser 

41.7 
31  2 

Old-fashioned  tooth  harrow 

27  0 

One-horse  cultivator 

14  5 

One-hoTse  mower 

187  5 

Com.  iron  garden  rake  (10-tooth  steel),  doz. 
One-horse  horse-power 

15  6 
104  1 

Binder 

562  5 

Com-sheller  (1  hole) . 

25  0 

Common  hoes  (cast-steel  socket),  per  doz. . 
Common  rakes  (wood),  per  doz 

14.5 
8  3 

Scythes  (Ames'  gras8\,  per  doz 

31  2 

Scythe  snaths  (patent),  per  doz 

18  7 

Shovel  (Ames),  per  doz  

39  5 

Spades  (Ames),  per  doz 

46  6 

40.0 

Total 

569.4 

388.1 

1,615.1 

886.7 

2,048.2 

1,187.7 

4.11 


STATISTICAL  TABLES. 


Freight  Bates   on  Wheats  hy  Lake,   Canal,  and  Bail,  from  Chicago  to   Neio 

York,  1860-95. 
[Prepared  by  J.  C.  Brown,  statistician,  New  York  Produce  Exchange.] 


Calendar 
year. 


1861 
1862 
1863 
1864 
1865 
1866 
1867 
1868 
1869 
1870 
1871 
1872 
1873 
1874 
1875 
1876 
1877 


Average  rates  per 

bushel. 

By  lake 

and 
canal,  a 

By  lake 

By  all 

and  rail. 

rail. 

Cents. 

Cents. 

Cents. 

24.83 

26.55 

26.33 

22.91 

28.38 

26.62 

29.61 

22.36 

22.79 

29 

42.6 

25.12 

25 

35.1 

17.1 

22 

33.3 

20.24 

25 

31 

24. 4r 

28 

83.5 

19.19 

26.9 

83.2 

14.1  . 

16.9 

28.7 

11.43 

14.6 

24.1 

9.58 

T1.8 

16.5 

11.24 

15.8 

20.3 

Calendar 
year. 


1878 
1879 
1880 
1881 
1882 
1883 
1884 
1885 
1886 
1887 
1888 
1889 
1890 
1891 
1892 
1893 
1894 
1895 


Average  rates  per  bushel. 


By  lake 

and 
canal,  a 


Cents. 
9.15 
11.6 
12  27 
8.19 
7.89 
8.37 
6.31 
5.87 
8.71 
8.51 
5.93 
6.89 
5.85 
5.96 
5.61 
6.33 
4.44 
4.11 


By  lake 
and  rail. 


Cents. 
11.4 
13  3 
15.7 
10.4 
10.9 
11.5 
9.55 
9.02 
12 
12 
11 
b  8.7 
8.5 
8.53 
7.55 
8.44 
7 
6.95 


By  all 

rail. 


Cents. 

ir.7 

17.3 

19.9 

14.4 

14.6 

16.5 

13.125 

14 

16.5 
b  15.74 
)  14.5 

15 

14.31 

15 

14.23 

14.7 

12.88 

12.17 


a  Including  canal  tolls  until  1882,  but  not  Buffalo  transfer  charges. 
b  Averages  of  officially  published  tariffs. 

Freight  Bates  on  Grain  and  Flour  from   St.  Louis  to  Various  Points  dur- 
ing each  Year  from  1876-95. 
[Prepared  by  George  H.  Morgan,  secretary  Merchant's  Exchange,  St.  Louis,  Mo.] 


To  New  Orleans  by  river. 

To  New  York  by  rail. 

To  Liverpool. 

Calendar  year. 

On  grain  in 

sacks  per 

100  pounds. 

On  wheat  in 
bulk  by 

barges  per 
bushel. 

On  wheat 
per   100 
pounds. 

On  flour 
per  barrel. 

Via   New 

Orleans    on 

wheat  per 

bushel. 

Via  New 

York  on 

wheat  per 

bushel. 

]876         

Cents. 

21*"" 

17.5 

18 

19 

20 

20 

17.75 

14 

15 

16 

18 

15 

17.93 

15.66 

16.28 

16.87 

17.54 

17.14 

13.00 

Cents. 

%.b 

7.25 

7.75 

8.25 

6 

6.42 

5.5 

6.63 

6.4 

6.5 

6.5 

6.5 

5.95 

6.58 

6.88 

6.50 

6.55 

5.89 

5.95 

Cents. 

39.5 

41 

3-i 

33.5 

J2 

32 

29.5 

33 

26 

22.14 

29 

32.18 

29.5 

28.5 

27.63 

29 

26.62 

28.5 

24.73 
a23.57 

Cents. 
79 
82 
76 
67 
84 
64 
59 
66 
52 

44.29 
58 

64.25 
59 
58 

52.63 
58 
58 
57 
50 
47 

Cents. 

22^66 

19.58 

14.58 

15.11 

16.17 

14.8 

15.17 

17.33 

14.33 

15.75 

14 

14.71 

11.69 

12.13 

Cents. 

1877 

]S78        

1879  

J880        

J881        

1882  

1888 

1884 

1885          

23.66 
27 

21.25 
20  5 

1886 

24 

5887          

24.8 

1888 

22.95 

1889        

24.97 

1890 

1891 

1892 

21.48 
23.55 
21 

1893          

21.72 

1894             

18.71 

1895 

18.33 

a  The  figures  represent  published  rates.    Lower  rates  were  probably  secured. 

4.12 


STATISTICAL  TABLES. 


Tiine  Table  of  Procedure— The  Act  of  1873. 
Summarized  by  Prof.  Laughlin. 


SENATE. 


Submitted  by  Secretary  of  the  Treasvry 

Referred  to  Senate  Finance  Committee 

Five  hundred  copies  ordered  printed 

Submitted  to  House,  with  supplementary  report  and  corre- 
spondence    

Reported,  amended  and  ordered  printed 

Debated 

Passed  the  Senate  by  a  vote  o/36  io  14 * 

Senate  Bill  ordered  printed 

Bi'l  reported  with  substitute,  and  recommitted 

Original  IMl . reintroduced  and  printed 

Reported  and  debated 

Recommitted   ' 

Reported  from  Coinage  Committee,  printed  and  recom- 
mitted..      

Reported  back,  amended  and  printed 

Debated ' 

Amended  and  passed  by  vote  110  ^o  13 

Printed  in  Senate ',' 

Reported  with  amendments  and  printed 

Reported  with  additional  amendments  and  printed 

Passed  Senate 

Printed  with  amendments ..'...'..'.'........ 

Conference  committee  appointed ''. 

Report  of  conference  committee  presented  and  concurred  in. 

Became  a  law  February  12,  J8?3 


ApyrU  25,  1870 
April  a8, 1870 
May     2, 1870 


Dec.  19,  1870 
Jan.  9,  1871 
Jan.    10, 1871 


May  29,1872 

Dec.  16,  1872 

Jan.  7,  1873 

Jan.  17,1873 


Jan. 
Feb. 


27,  1873 
6,  1873 


HOUSE. 


June   85, 1870 


Jan. 

13,  1871 

Feb, 

25,  1871 

Mar. 

9, 1871 

Jan. 

9,1872 

Jan. 

10, 1872 

Feb. 

9, 1872 

Feb. 

13,  1872 

April 
May 

9,  1872 
27,  1872 

Jan.  21,1873 
Jan.  25,  1873 
Feb.      7, 1873 


Prices,  Wages,  Purchasing  Power,  1845-90. 
Condensed  from  the  Senate  Report  of  1892. 


1845 


Meat 

Other  food 

Cloths  and  clothing 

Fuel  and  lighting 

Metals  and  implements. .. . 

Lumber  and  building  ma- 
terials   

Drugs  and  Chemicals 

House  furnishing 

Miscellaneous 

Average  of  all  prices .' 

Average  of  all  wages 

Average  wages  by  importance 

Salaries  of  city  teachers 

Paper  money 

Gold  prices  of  silver  bullion  in 
London 

Purchasing  power  of  wages  . ' 


79.4 
83.8 
97.1 


110.8 

106.7 
121 
102.3 
114, 


1830 


91.3 
102.6 
114.8 

102.2 
123.6 
125.6 
107.7 


102.8  !  102.3 
92.7 


85.7 
74.8 
100 


90. 
83. 
100 


1855     1860 


95.3  97.3 

84.4  90.6 


104.7 
114.5 
94.7 
121.1 
117.8 

103.4 

129.2 

121.1 

115.2 

113.1 

98 

97.5 

91.4 

100 

100 


100 
100 
100 
]00 
100 

100 
100 
100 
100 
100 
100 
100 
100 
100 


1865 


197 

240.3 

299.2 

237.8 

191.4 

182.1 
271.6 
181.1 
202.8 
216.8 
143.1 
148.6 
134.7 
49.5 


100 

100   66 


1870  1875  18S0  1885 


174.3 
146.3 
139.4 
196.5 

127.8 

148.8 
149.6 
121.6 
148.7 
142.3 
162.2 
167.1 
186.3 
81.1 


114. 


140.4 

135 

120.1 

155.5 

117.5 

143.7 

144.2 

95 

122.9 

127.6 
158.4 
158 
188.1 
88.8 


124.1     1 


103.6 
116.9 
104.5 
100.2 
96.3 

130.9 
113.1 

85.2 
109.8 
106.9 
141.5 
143 
182.8 
100 


84.7 


1076 
97.2 
84.8 
89.6 
77.4 

126.6 
86.9 
70.1 
97.5 
93 

150.7 
155.9 
186.3 
100 


99.6 
103.5 
82.4 
92.5 
73.2 

123.7 
87.9 
69.5 
89.7 
92.3 

158.9 
68.2 
86.3 

100 


78.7      77.4 
162     I  172.1 


4.13 


# 


STATISTICAL  TABLES. 


Wages  in  U.  S.  and  Other  Countries.     From  Report  of  Senate  Committee  of  1892. 


Trades  and  Occupations. 

1 

8 

i 

1884. 
$2.40 
1.90 
1.80 
1.20 
2.40 

I 

Bricklayers 

18i)l. 

$21.18 

13.38 

21.00 

9.60 
23.10 
21.00 
17.30 
19.00 

1892. 

$2.04 
1.14 
2.18 
1.14 
1.56 

1894. 

$10.00 

3.60 

10.80 

3.50 

4.25 

1884. 

$9.00 
5.40 

14.76 
4.90 
9.00 

1884. 
$9.00 

Hodcarriers 

4.63 

Masons 

9.74 

Tenders 

8.81 

Plasterers        

9.40 

Slaters       

13.20 

Roofers 

1.80 

8.40 

1.80 

8.70 

Plumbers                    

Assistants 

9.60 

Carpenters 

fJasfitters                   

15.25 
11.90 

1.56 

2.40 

9.00 

9.84 

18.00 

Bakers 

7.60 
8.00 
5.50 
6.00 
6.00 
5.40 
10.00 
10.00 
5.00 
4.50 
7.25 

3.72 
3.04 

"*3'.78" 

"'i.'68' 

3.60 
16.30 
13.80 

9.20 
20.00 
12.30 

12.00 

Blacksmiths      

16.02 

1.85 

12.83 

10.25 

Brickmakers 

9.16 

Brewers 

Butoliers            .            

11.75 

3.00 

Cabinetmakers 

13.32 

"2!88' 
1.68 

14.76 
4.20 
7.50 
7.50 

14.45 

Confectioners 

10.38 

Ciffarmakers 

12.50 

Coopers 

16.08 

►Cutlers                           

Distillers                     

4.00 
3.60 

3.60 
3.00 
3.16 
3.66 
3.90 
5.10 
3.75 
4.15 
2.90 
3.30 
5.76 
5.76 
2.60 
2.95 
9.00 

1.25 

1.75 
*2;46* 

"3!56* 

3.50 
7.40 

13.50 

Draymen  and  teamsters ...... 

Drivers. — 
Cab  and  carriage 

10.80 

1.50 

Street  car 

8.50 

Dvers 

9.00 

10.00 

Furriers                     

13.00 

Gardeners    

13.50 

1.48 
3.84 
1.68 
6.30 
1.92 

5.00 
9.00 

6.50 

TTorseslioers 

Jewelers 

13.90 
3.50 

Ijaborers  Dorters  etc 

8  88 
16.80 
16.42 

1.14 
1.80 

7.85 

Millwrights 

1.92 
3.00 

9.42 

12.00 

Potters 

14.00 

3.84 

'  4;92" 

10.00 

fii+pvedores           

RtrktippiittpTtj 

21.00 

2.18 

Tanners    

3.66 

7.14 

11.50 

7.50 

3.84 

2.88 

'"i.*92' 

4.92 

4.92 

12.10 

7.50 

12.00 

Tailors 

2.95 

12.50 

11.38 

Tinsmiths .' 

14.35 

14.00 

4.14 


% 


-TAl'lSTIC^AL  TABLES. 


Diagram  Showing  Prices    of  Silver,    Wheat,    Pork,  Freight,  Telegrams,  etc., 

1873-95. 

From  Wheeler's  "Real  Bi-Metallism "  (Copyright,  1895,  by  G.  P.  Putnam's  Sons)  by 
permission  of  Messrs.  Putnam's  Sons. 

76  77  78  79  M  81  82  83  84  85  86  87  "88  89  90  91  9g  93  SAI895 


Diagram  showing  comparison  between  prices  o{  silver  per  fine  ounce  from  1873  to  18135  (May  23d),  and  the  following: 
i-io  bbl.  Mess  Pork  ;  i  bushel  No.  2  Red  Winter  Wheat  (from  1873  to  1877.  Milwaukee  No.  2  Spring  Wheat)  ;  i  bushel  N4 
2  Mixed  Corn  J  i  bifthel  No.  2  Mixed  Oats  ;  and  I  pound  Western  Steam  Lard. 

Also  average  price  of  Telegrams  iJl  the  U  nited  States,  and  freight  per  bushel  Wheat,  Chicago  to  New  Vork— all  r»il. 
All  the  prices  are  in  cnnency,  except  that  of  silver  from  1873  to  1878.  and  all  in  the  New  York  Market. 


4.15 


STATISTICAL  TABLES. 


Diagram  showing  the  Course  of  Prices,  Wages,  and  ilie  Purchasing  Power  of 

Wages,  1860  to  1890. 


The  course  of  prices  shows  the  average  variation  from  a  standpoint  of  100  in  1860  computi 

upon  the  market  prices  of  over  200  articles.  *        ,.     .    i      ^  ^«^„t^n¥„,^r 

The  course  of  wages  is  computed  on  the  general  average  of  mechanical  and  manufactuni 

mdust^ries^^^  on  which  this  diagram  is  based  are  given  in  the  Report  of  the  Finance  Committ 
of  the  Senate  on  Prices  and  Wages  for  52  years,  compiled  under  the  direction  of  Commieaion 
Carroll  D,  Wright.  .-.x-— 


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